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Building Business Credit

    • 3 posts
    July 11, 2009 3:39 PM EDT
    In December of 2009 my investment company will be reaching two years of being incorporated, however, I just recently began actively building my business credit even if I have all 5 creditors reporting and reach a paydex score of 75+ let`s say hypothetically by January 2010 when I apply to creditors who require you to have that paydex score of 75+ aren`t they going to look at the fact that my credit history is not even a year old? I`m just thinking that if I were going to extend credit to a business I`d look at the length of time that business has paid its bills and to be honest anything less than 2years would still be high risk to me considering the applicant only has accounts with places like Nebs, TMobile, phone companies, etc. without financials to prove that this business has the ability to pay I wouldn`t lend very much if at all-maybe I`m over thinking this....
    • 23 posts
    November 25, 2007 6:44 AM EST
    Hi Patti,
     
    Building credit references for your business is an important step in getting financing.  Every application I take for a loan or a lease asks for "trade credit references".  
     
    How do you get them?   You ask vendors for credit terms.   Since you have a new business not every vendor will give you terms but you want as many as possible.  You have to ask the question to each vendor "do you offer credit terms and how can I get an account?"
     
    Major corporations are the easiest way to get credit terms.   Office Depot, Dell, and many other large businesses that cater to small business all offer credit terms.   Ask for an account, fill out the application, and once you`re approved use the account to purchase something.   Make sure you pay their bill on time!!   I can`t stress this enough. 
     
    This is how you begin to build a credit record for your corporation.   As you get more accounts at the big companies and use them for purchases you can use these trade credit references to get accounts at smaller companies.   Having good credit references from suppliers will be crucial.   Take whatever credit terms they will give you and as you build a track record with them ask for a larger credit limit. 
     
    Credit reports go to the major credit reporting agencies from the larger corporations.   You don`t want to called a "slow paying account" or "problem account" so keep your record clean by paying on time.   
     
    When businesses review your credit application they will call your trade credit references.  They will ask the dollar limit of the account and whether you pay your invoices on time.  
     
    Your personal credit rating is an important factor in any business financing so make sure you`re in good standing with your creditors.   Before applying for any business financing, review your personal credit reports from the three major credit reporting agencies and contest anything that is an error or mistated.   Also request that old reports over 7 years be deleted if they are negative. 
     
    I don`t think the D&B account is essential to getting your company financed.   We rarely ask for it unless it`s a very large financing involving millions of dollars.   D&B ratings are used more for trade credit than for business loans and leases.
     
    When you`re ready to get financed I hope you`ll remember my reply and discuss it with me. 
     
    Best regards,

    ---
    Doug Atherton
    Regional Vice President
    Equity Corporate Finance, Inc.
    DouglasA@equitycorpfinace.com
    888-498-8999 ext. 109

    • 4 posts
    April 24, 2012 9:39 AM EDT

    You should also consider running your business credit report on a regular basis.  Just need your EIN and run regular sweeps, to protect whether there may be inaccurate information hitting your business credit standing.  

    Companies like Experian offer this for a nominal fee.  

     

    • 2 posts
    February 10, 2009 5:45 AM EST
    You can also find vendors that report to Experian Business.

    For example, we are a web design company that is registered with Experian to report our accounts receivables to Experian each month. 

    So our clients get a web page that they need anyway, while at the same time, they get the benefit of having us report their corporation to Experian. 

    In addition, we can be used as a trade reference to DNB.

    www.bitwavedesign.com

    • 14 posts
    June 30, 2008 5:41 AM EDT
    There are lots of places to get help with building a strong business credit score. Just do an online search.
    • 1 posts
    September 30, 2008 6:50 AM EDT
    I found a very helpful E-book for 10 bucks that takes you step by step on how to build your business credit. I found it very informative. go to www.bybc.info

    Hope this helps

    • 4 posts
    November 15, 2007 9:09 AM EST
    We have just recently incorporated and are gearing up to apply for a business loan, but do not want to use our personal credit any more. I am not willing to pay D&B 500 bucks to add my already established vendors to my credit listing. I see other online Business credit coaching services, etc, but is that really necessary? How is business credit reported, and to whom? And how can I do this myself in a relatively short amount of time?
    vsmcorp12/1/2007 1:24 PM

    ---
    Patti
    Virtual Soundman Corporation
    http://www.virtualsoundman.com

    • 2 posts
    December 10, 2013 4:29 AM EST

    Hi vsmcorp,

     

    I know this is too late response of your question but there has nothing anyone has update this thread. I found aaacredit.net they proivde you complete details for your tenant,business partner or any employee.

     

    tenant screening

    business credit reports

    criminal background

    reference checks