How to Rebuild Credit With an LLC
- 1). Register your business as a Limited Liability Company (LLC). Create and sign an LLC Operating Agreement and write your business' articles of organization. Register your business' name along with your LLC Operating Agreement and articles of organization with the Department of State in your state.
- 2). Contact a local lender and apply for a business line of credit. Provide your registered name, employer identification number, business license number, business address and dedicated business telephone number.
- 3). Comply with eligibility requirements for the line of credit. For example, standard business credit applications for an LLC require a detailed breakdown of how you expect to use the line of credit, a repayment plan outlining how you intend to repay the line of credit, a business plan and credit reports.
- 4). Guarantee your business line of credit with collateral, which can vary from an auto title, residential property or commercial inventory.
- 5). Provide one copy of your consumer credit report or sign a release permitting the lender to view your credit reports. You may also need to provide bank statements.
- 6). Provide one copy of your business' credit report along with profit and loss statements from the previous three to five years.
- 7). Endorse your application. Agree to the terms of conditions of your business line of credit with your signature.
- 8). Purchase inventory. Use your business line of credit to cover start-up costs which can include rent fees, inventory costs and refurbishment costs.
- 9). Pay your business line of credit on time and charge within your credit limit. Maintain a 30 percent utilization rate, which means you only charge within 30 percent of your credit limit to increase your personal credit scores.
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