IV. Building Business Credit

Every highly successful business in this country has business credit. Most of these companies used their business credit to get as big as they are today.

But contrary to what many believe, business credit is not only for big companies. Any company can build business credit!

Big companies are often the ones which enjoy the benefits of business credit the most. This is because they have CFOs who know how to get and use business credit, whereas most small businesses don’t.

But you can get your hands on the exact same credit these larger companies have, if you know the formula to get it.

Get vendor credit immediately, starting now. It takes those accounts 30 – 90 days to report, giving you a profile and score.

With that profile and score you can then start getting retail credit. And in a total of about 4 – 6 months after starting the process, then you can start to get cash credit.

90% of vendors in this country do not report the credit they issue you. This is why so many business owners think they have established business credit when they do not.

So you must find vendors which report to the business credit reporting agencies.

This is the hardest and most challenging part of building business credit.

You must start a business credit profile and score with starter vendors. Starter vendors are ones which will give you initial credit even if you have no credit, no score, or no tradelines when you apply.

Most retailers like Staples will not give you initial starter credit. So don’t even try applying.

Building business credit can as simple as finding the credit you want, applying with no SSN, and getting approval. Then start using your credit and pay your bills early.

If you follow the steps, you should be well on your way with establishing business credit.

Get Vendor Accounts

When establishing business credit, there are three types of credit you can get:

● Vendor credit, starter accounts that often offer Net 30 terms. Sometimes revolving.

● Retail credit, generally revolving credit cards available in retail stores.

● Cash credit, often revolving credit cards like Visa and MasterCard.

You start with vendor credit or starter accounts which often offer Net 30 terms. Then you move onto retail credit. These are usually revolving credit cards available in retail stores. Finally, you get cash credit. These are more universal revolving credit cards like Visa and MasterCard.

The biggest mistake entrepreneurs make when building business credit is that they try to apply for credit which is harder to get first, and skip credit which is easier to get.

But many retailers and banks will not approve a business owner for credit until their EIN credit profile and score are established. If you try to apply for harder to get credit without an established business credit profile and score, you usually get a denial.You must get approval with credit that’s easier to get. Then after you use those accounts and pay your bills, the accounts are reported to the business credit reporting agencies.

Then and only then do you have an established business credit profile and score. Once your business credit is established, you can start to get approval for retail revolving credit next.

Seek out vendors which approve a business for credit, even if none is built yet. There are many vendor sources which are well known for this.

Keep in mind: all applications ask for your Social Security Number. But you do not need to provide your SSN on the application. If you supply your SSN, they will pull your personal credit. And if it’s bad, you get a denial.

When you leave the SSN field blank, they’ll pull your business credit. And once they see that you have business credit established and at least 3 payment experiences reporting, you start to get approval for retail credit.

Make Sure You Monitor Your Payment Experiences

Building business credit is all about tradelines, or what are called payment experiences.

A payment experience is the reporting of an account to a business credit bureau.

To effectively build business credit you must be able to monitor your business credit reports to see these payment experiences being added. When you see this, you know when it’s time to apply for more credit to build your credit profile and score.

For example, you need payment experiences before getting revolving retail credit. Monitor your credit so you know when you have accounts reporting.

You should be monitoring your credit through Experian and D&B. You can go to their sites directly to enroll for credit monitoring.