Building USA Credit
To stand any chance of getting finance locally in the USA you will need to try and build up a good credit history. This isn't the easiest
thing to do if you are based overseas, as you will have an empty credit report, which is treated the same as having bad credit.
Credit Cards
Once you get an International Tax ID Number (ITIN) you should get a secured credit card. I had one with Bank of America which reported onto
my credit file. How it works is the bank holds an amount in reserve, equal to your credit limit on the card, so there is little risk to them.
The advantage is that using it on a regular basis, over the course of 6-12 months, paying off the balance in time, will show banks that you
can be trusted to have a traditional unsecured credit card. Once you get a traditional card and show you can handle credit well, you can
approach your bank to get borrowing for your properties.
Business Credit
Once your LLC is established you should apply for an EIN number from the IRS. If you have an ITIN or SSN you can apply for an EIN on-line at
the IRS website and receive the number straight away, using the link below:
Apply for an EIN Number On-Line from the IRS
Alternatively I offer an EIN registration service for $100 to get your newly formed LLC an EIN number.
If you have a Limited Liability Company (LLC) the credit issue is even more important, as once you personally have good credit you can
personally guarantee credit for your business. Then after some time, you should be able to remove the personal guarantee, as the business
will have an established credit record. Once you have owned a personal unsecured credit card for a few months, try applying for a
business credit card. The more proven types of credit your business has, the more chance you will have larger lines of credit available then for
buying property through the business. Because the business is a US entity, when you have good credit it will be more widely accepted.
Don't forget your business needs to show income to get lines of credit from the banks! Also having a higher balance on the account can
improve your chances.
Dun and Bradstreet (DUNS Number)
The next way to build your business credit is to get a DUNS number. This is available from Dun and Bradstreet and it is like a tax ID
number. Then when you buy from companies that offer your business net payment on account, who are also registered with Dun and Bradstreet,
they will report your payment history to your DUNS file. Once you have three companies that have reported you will receive a PAYDEX score.
This is like a credit score and is the holy grail when it comes to getting business credit.
You need to continue using these companies, that report to Dun and Bradstreet to maintain or improve your PAYDEX score.
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Please Note - The information contained in this section is only my opinion and should not be regarded as legal or tax advice