Building Your Business Credit Report

Business Credit ReportA business credit report can be started much the same as a consumer report commonly is, with small credit cards.

The business can be approved for small credit cards to help them build an initial credit profile.

These types of initial cards in the business world are commonly referred to as “vendor credit”.

Net 30 terms are common with most vendor credit sources. This means they will give you credit on “net 30” terms, giving you 30 days to pay the bill you owe in its entirety.

Some companies will require you buy their products while others won’t.

Some companies will have you pay for your first couple of orders, others won’t.

Some companies report your credit very quickly and it reports quickly, some don’t.

Look out for all of these things when applying with vendors.

Always apply first without using your SSN. Some vendors will request it and some will even tell you on the phone they need to have it, but submit first without it.

Most people you speak with at the credit issuers don’t even know that you can get business credit without supplying your SSN, so follow these steps I outline and don’t apply with your SSN.

When your first Net 30 account reports your “tradeline” to Dun & Bradstreet, the DUNS system will automatically activate your file if it isn’t already. This is also true for Experian and Equifax.

Some of the most popular vendor sources include: Uline, Laughlin & Associates, Quill Office Supplies and Reliable Office Supplies.

Next, start building revolving accounts…

You will need a total of five payment experiences reported to start getting revolving store credit.

Don’t apply for store credit with no payment experience, no score, and no profile, or you WILL get denied.

Most major retailers do offer revolving business credit. To get approved they will want to see that you do have established payment experiences, an established credit profile with at least one preferably two reporting agencies and positive credit scores with the reporting agencies that your credit is being reported.

Your major business credit scores are based on the timeframe you pay your bills.

So to have good scores you just need to make sure you pay your bills on time or early, the earlier the better.

So even with net 30 vendor terms, try to pay your bill as soon as you get it to have the highest possible scores.

Remember, many credit issuers have their computers approving files automatically. These computers are looking for high scores, so give them what they want.

You should have five payment experiences reported to start applying for revolving credit. Some starter revolving accounts include: Radio Shack, Lowes, Home Depot, Staples and Office Depot.

Most major stores do offer business credit even though they don’t promote that they do. So once you have followed the steps outlined here, you can start getting credit with these major retailers: BP, Chevron, Walmart and Target.

These stores also offer business credit: Amazon.com, Best Buy, Nordstrom’s, Sam’s Club, Costco, and many more.

Finally, get CASH credit…

Once you have a total of 10 payment experiences you can then start getting approved for cash credit sources.

It’s also recommended that you have at least one account with a $10,000 high credit limit so your cash limits are as high as possible.

How to Start Getting Business Credit

Getting Business CreditA vendor line of credit is when a company (vendor) extends a line of credit to your business on “Net 15, 30, 60 or 90” day terms. This means that you can purchase their products or services up to a maximum dollar amount and you have 15, 30, 60 or 90 days to pay the bill in full. So if you’re set-up on Net 30 terms and were to purchase $300 worth of goods today, then that $300 is due within the next 30 days.

You can get products and services for your business needs and defer the payment on those for 30 days, thereby easing cash flow. And some vendors will approve your company for Net 30 payment terms upon verification of as little as an EIN number and 411 listing.

Always apply first without using your SSN. Some vendors will request it and some will even tell you on the phone they need to have it, but submit first without it. Many don’t even know you can get approved without it.

Most credit issuers will approve you without your SSN if your EIN credit is strong enough. If your EIN credit is not good enough, you might be declined and they then might ask for your SSN. No matter what ANY credit representative tells you, credit CAN be obtained based on your EIN only.

You must start a business credit profile and score with starter vendors. Starter vendors are ones who will give you initial credit even if you have no credit, no score, or no tradelines now. Most stores like Staples will NOT give you initial starter credit so DON’T even try applying.

Most stores will NOT approve a business owner for business credit unless the owner has an established credit profile and score, just like in the consumer world. Vendor accounts must be used first to establish a profile and score, and then store credit can be obtained. It usually takes only 90 days or less to establish a score and profile with trade lines.

Get approved for Visa, MasterCard, Discover, and AMEX cards with limits of $5k-10k once you have 10 payment experiences established. Dell is notorious for issuing higher limits, so apply for them only after getting approved for other revolving store cards. Limits equal to highest store credit card on report.

Continue to use and grow your credit to get access to even more business cash credit for your company.