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Advice on building biz credit from scratch

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Established Member

Advice on building biz credit from scratch

 

Although I live in Australia, I'm a US citizen and started a rental business in Texas 4.5 years ago.  I got 3 investment (business) loans to buy 3 Texas properties: the 1st 4 yrs ago, the 2nd 2.5 yrs ago, and a 3rd 2 yrs ago.  I had nil credit (both personal and business) each time, but found a local community bank willing to lend to me based on my Australian credit reports/scores (and the strength of the investments).

 

I assumed the bank would report my mortgage payment history (which has been perfect, never missing a payment) to the credit bureaus, which would then build up my business credit scores.  But I recently discovered that they never did in all that time, 4 yrs!  I asked them to report it but they said they do not report business activity.  I don't know if it's because they don't have to, don't want to, or both.  Apparently this is the norm for most (all?) banks/lenders.  Most reading this probably already knew that, but this is something I'm only learning just now Smiley Sad

 

If "business credit" is not built from a history of payments on investment loans, what is it built on?  A history of owning business credit cards?  Something else?

 

Any practical advice on steps I can take right now to start building my business credit would be very very much appreciated and welcome!  And if it helps with the advice, I am rapidly building up my *personal* credit score/reports: I'm currently an AU on my Dad's 12 yr old $35k CC acct (my Dad and his acct are both in the US), and have been approved last month for an $8k CC from Synchrony Bank.  Credit Karma (untrustworthy, I know) shows my scores near the 785 mark on both EQ and TU.

Message 1 of 21
20 REPLIES
Established Member

Re: Advice on building biz credit from scratch

Ok well, I found the sticky thread "Business Credit 101" and read the entire thing (not just the 1st post) and it looks complicated.  Or rather, it looked complicated: imperfectfuture referred to another thread where myjourney stated building biz credit these days (after the GFC) doesn't requiring fiddling about getting DUNS numbers, Net30 accts, or Paydex scores... that it is much easier and straightforward to simply apply for biz CCs (assuming you have good/great personal credit scores).

 

In fact myjourney goes on to say an easy first biz CC to apply for is the Cap1 sparks cash... is this still the most recommended first biz CC to apply for to begin building my biz credit record/scores?

Message 2 of 21
Valued Contributor

Re: Advice on building biz credit from scratch

C1 Spark is easy  card to get. 

Message 3 of 21
Established Member

Re: Advice on building biz credit from scratch

So myjourney says it costs 3 HP's... is that on my personal credit file, or my LLC's?

 

Do you think I stand a chance of getting the C1 Spark?  My personal file looks great but that's due to tricks (AU on my Dad's CC): 2 open accts (AU on Dad's 12yr old 35k line, plus 1 brand new 8k CC with Symphony), AAoA=6yrs, no derogs, 6% utilization, FAKOs are: EQ=795 (CK), TU=784 (CK), and EX=795 (Nav)

Message 4 of 21
Regular Contributor

Re: Advice on building biz credit from scratch

yes, thats on personal credit file. im looking to start my business file from scratch as well. Can anyone suggest a biz card that doesnt cost 3 hp and fairly easy to get?

Message 5 of 21
Established Member

Re: Advice on building biz credit from scratch

Assuming you're a corporate entity with an EIN and you've obtained a DUNS number, I'd start off with Net30 accounts like Grainger, Quill, etc...  After 6-9 months or so or if you've done that already, go for Citi backed Exxon or Sunoco gas cards or Staples or Office Depot no PG apps.  

 

If you get those and use them for half a year or so, try Sams Club and BJ's, both offer no PG options, although Sams can be tricky if you get a store clerk who's difficult and insists they can't submit the application without a PG.  

 

Like anything credit, it takes time and I think even longer with NO PG business credit.  If you don't mind applying with a PG and your scores are high 600's to anywhere in 700's then go for Chase or AMEX business cards.

 

To put a real fine point on your original statement, I believe Crapital 0-ne is the only bank that triple pulls, so any other you're likely only looking at one pull, and I believe AMEX is a soft pull if approved, or could be the other way around, but most bank apps using PG will be 1 pull

Message 6 of 21
Established Member

Re: Advice on building biz credit from scratch

My company is rentals, I don't need anything from Grainger, Quill, Staples, Office Depot or the like.  That's why going straight to biz CCs was more attractive to me.  But if I can't get a no-PG line without all the Net30/DUNS/Paydex gumpf, then I guess I'll have to grit my teeth and go through the motions after all.

Message 7 of 21
Community Leader
Super Contributor

Re: Advice on building biz credit from scratch


textral wrote:

My company is rentals, I don't need anything from Grainger, Quill, Staples, Office Depot or the like.  That's why going straight to biz CCs was more attractive to me.  But if I can't get a no-PG line without all the Net30/DUNS/Paydex gumpf, then I guess I'll have to grit my teeth and go through the motions after all.


I believe most majors being Visa/MC/Amex are all going to require a PG..  Keep in mind if you go for Cap1 they report to your person credit as well as most others are hidden from your personal credit

Chase | Citibank | Amex | BofA | PenFed | NFCU | Discover | Barclay's | US Bank | Fifth Third Bank | FNBO
Message 8 of 21
Frequent Contributor

Re: Advice on building biz credit from scratch

Take what you read here including my posts with a grain of salt, but what's your real goal and reason for wanting to build business credit?  That along with real FICO scores would help some of us help you.

Message 9 of 21
Established Member

Re: Advice on building biz credit from scratch


textral wrote:

My company is rentals, I don't need anything from Grainger, Quill, Staples, Office Depot or the like.  That's why going straight to biz CCs was more attractive to me.  But if I can't get a no-PG line without all the Net30/DUNS/Paydex gumpf, then I guess I'll have to grit my teeth and go through the motions after all.


Okay, so to clarify my assumption of your goal...  You want to build biz credit so you can obtain credit cards under biz liability only and not using PG.

 

If that's the case, then the best way to do that is through Net30/DUNS/Padex, etc...  For my business that's how I did it.  Net30's, then Citi backed gas cards, then BJ's & Sams Club Mastercards under biz liability only.  Otherwise most banks will want a PG and will typically only report to personal credit if you default, but Crapital 0-ne will report to personal credit from day 1.

 

Very few options for Business Liability Only cards.....

Message 10 of 21