Business Credit Building Step 2- Getting Your Business Credit Reports
Business Credit reports are offered by Experian, Dun & Bradstreet, and Equifax. You will first want to get a copy of your business credit reports to see what is being reported before you start your business credit building.
Access your business credit reports with Experian, Equifax, and Dun & Bradstreet. You won’t need to get reports with all three reporting agencies, but you should at least have monitoring setup with Dun & Bradstreet, and possibly Experian.
Smart Business credit reports from Experian cost $37- 175. With these reports you can find out how many trade lines are reporting, see if you have a business credit score assigned, see if you have an active Experian Business Profile, and check on recent inquiries.
It typically takes more time to create a file with Equifax Small Business than D&B and Experian. This is because not a lot of vendors and creditors actually report to Equifax, most of them report to Experian or D&B. This is also why it's important to apply with the credit providers who report to Equifax when you find them. You can get setup for Equifax credit monitoring for as little as $19.95 monthly.
Dun & Bradstreet offer a Credit Monitor product where you can get unlimited access to your D&B reports and scores for $49 monthly.
IMPORTANT NOTE, if you do get setup for this you might get a call from Dun & Bradstreet Credibility. Keep in mind this is not Dun & Bradstreet themselves, this is a completely separate privately owned company.
Do NOT purchase their “credit builder” program no matter what they tell you. This is NOT something you need and NOT something you should pay for. This program only adds trade references to your report, but instead you will be building your business credit using real useable credit.
Access your business credit reports with Experian, Equifax, and Dun & Bradstreet.
Business Credit Building Step 3- Getting Vendor Credit
When you started building your consumer credit report you probably did so with small-limit credit cards, possibly even secure credit cards. A business credit report can be started much the same as a consumer report commonly is, with small credit cards, but in the business world these aren’t secure credit cards, they just have set repayment term versus being open-ended revolving accounts. Your business can be approved for small credit cards to help you build an initial credit profile. These types of initial cards in the business world are commonly referred to as “vendor credit”.
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 (or what’s known as payment experiences, 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 day.
A 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.
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 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.
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. It’s important to note, in the consumer credit world we refer to these types of accounts as “tradelines”, but in the business world they are called payment experiences.
A payment experience is the reporting of an account to one credit reporting agency. So if you get approved for a Staples account that reports to both Experian and Dun & Bradstreet that would actually count as 2 payment experiences. But if that account only reported to Experian and not D&B, it would only count as one payment experience.
You need to have a total of at least five(5) payment experiences of Net 30 day pay accounts reporting to be able to start getting revolving store credit cards. Some vendors require an initial prepaid order before they can approve your business for terms. Some companies like Uline might even require you purchase from them 3 times in order for them to extend you credit, if you have no credit established now. Your vendors do not necessarily.