Maintenance
Part of Credit foundations: the practical version
Credit foundations checklist for a new business: entity, money, records
A credit foundations checklist for a newly formed company: what to file, how to keep money apart, which records to hold and what to look up before applying.
This is the groundwork a newly formed company needs before any credit-building activity does anything useful. None of it involves borrowing. Most of it is paperwork you can file yourself, which is exactly why it gets skipped.
Work through it once, properly, and a lot of later problems never happen. The order follows the first weeks of a business: the entity, the money, the records, then a look at what the bureaus already hold.
What to take away
- Form the entity, confirm licenses and write the exact legal name down before anything else.
- Keep business money, contracts and bookkeeping apart from your own from the first transaction.
- Keep formation, tax, bank and address records in one place, and make every record show the same details.
- Look up any existing bureau file before you open an account to fix a problem you never confirmed.
- Put renewals on a calendar, and recheck files whenever a name, address or entity changes.
1. Make the business a distinct legal thing
Start with the entity, because every later record is matched against it. File the formation paperwork, confirm licenses with the licensing authority and write the exact legal name down somewhere you will refer back to.
Whether you need an EIN depends on structure. The IRS generally requires one for businesses with employees, partnerships, corporations, and businesses subject to certain tax filing requirements; sole proprietors may need one for specific tax obligations. The IRS issues the employer identification number directly and at no charge, using Form SS-4.
Entity formation is filed with your Secretary of State or equivalent state business filing office, and licenses and permits come from the relevant state or local licensing authority. Requirements vary by jurisdiction and business type, so confirm the specifics with the responsible authority rather than from any general guide.
- Entity formation paperwork, such as Articles of Organization or Articles of Incorporation, filed with the Secretary of State or equivalent state business filing office.
- Required state and local licenses confirmed with the relevant licensing authority.
Establish the business
- Entity formed and registered, paperwork filed
- Exact legal name written down with punctuation
- DBA name registered and recorded alongside legal
- Federal tax ID if IRS criteria met
- Licenses and permits identified and obtained
2. Keep the business's money apart from yours
Open a business bank account in the business's legal name and use it for business money only. Pay business expenses from it and personal expenses from elsewhere, with no exceptions kept "just for now".
- A business bank account in the business's legal name, used for business money only.
- Business expenses paid from it, personal expenses paid from elsewhere. No exceptions kept "just for now".
- Bookkeeping in place from the first transaction rather than reconstructed later.
Separate business from you
- Business bank account in legal name
- Business expenses from it, personal elsewhere
- Bookkeeping from first transaction
- Business phone number and address used consistently
- Contracts and leases in business name
Separation is not cosmetic. It is what makes the business a distinct entity in the data and what makes your records defensible. A guarantee signed without reading what survives it is one of the credit foundations mistakes that follows a company for years.
3. Match the details across every record
Decide the single exact form of your business details: legal name, address including suite or unit, phone number and entity type. Then make every record match it, because this step matters most and takes the longest.
Use that standard across the records that identify or verify the business: state formation and licensing records, IRS records, bank accounts, business credit bureau files, supplier and lender accounts, and utility accounts. When details change, update each relevant record with the organization that maintains it, then recheck bureau files.
Consistency audit targets
- Formation and registration filings
- Tax registrations
- Bank and payment accounts
- Existing supplier and utility accounts
- Insurance policies
- Leases
- Invoices, quotes, website and public listings
Every variation is a chance for a matching engine to create a second, partial file for what it thinks is a second business. Fix the mismatches now, while there are few of them.
4. Keep the documents in one place
You will be asked for the same papers repeatedly, by suppliers, banks and landlords. Having them ready is the difference between a decision this week and a decision next month.
Keep a copy of / Where it comes from
- Formation filing and any amendments
- The state business filing office
- Operating agreement or bylaws
- Your own company records
- DBA registration
- The office where the name is registered
- EIN confirmation
- The IRS
- Required licenses and permits
- The relevant licensing authority
- Business bank account records
- Your bank
- Proof of business address, such as a lease or a utility bill in the business name
- Your own records
- Tax returns and bookkeeping records
- Your own records
Documents to keep ready
- Formation documents and amendments
- Registration certificates and standing
- Tax identification confirmation
- Licenses and permits with renewal dates
- Ownership structure and signing authority
- Recent bank statements and financials
- Proof of address, insurance, supplier references
5. Find out what already exists
Check for an existing bureau file before you spend money on building anything. People routinely open accounts to fix a problem they never confirmed they had.
- Check whether a file already exists for your business at each of the bureaus your lenders are likely to use.
Find what already exists
- Check for existing file at each bureau
- Check bureau-assigned business identifiers
- Read files and note errors and duplicates
- Ask suppliers and lenders in writing about reporting
Dun & Bradstreet uses the D-U-N-S Number as a business identifier. Its standard D-U-N-S Number request is free; use Dun & Bradstreet's request process and check the current processing estimate and any optional service fees before applying.
Experian Business assigns a Business Identification Number (BIN) to identify a business file. Ask Experian Business to locate your file and confirm its BIN; it is separate from a D-U-N-S Number.
Equifax Business is the third major business credit bureau. On its own site, ask whether it holds a file for your business and whether it assigns an identifier.
What each bureau holds shows how the three files differ once the paperwork is straight. Errors you find go through the business credit disputes checklist.
6. Keep it maintained
Some licenses and permits expire after a set period of time, so put renewals on a calendar from day one.
- A calendar entry for license and registration renewals.
- A recurring reminder to read your own files.
- A rule that any change of address, name, or entity structure triggers an update everywhere on the list in section 3, and a file check afterwards.
- Releases obtained and confirmed when accounts close or filings are satisfied.
The wider picture is in credit foundations. When you start opening accounts, the tradelines checklist takes over.
Common questions
How long does the whole list take?
An afternoon if your paperwork is already in one place, and several if it is not. The second pass a year later is short, which is the argument for writing down what you did.
Do I need every item before opening an account?
No. Sections one to three are the ones to finish first, because they are what later records get matched against. The rest can follow the work.
What if two documents already disagree?
Correct the one that is wrong at its source, not just on your own list, and keep proof of the correction. A disagreement left in place seeds a second record later.
