Advice on building biz credit from scratch

[Anonymous]

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@iph38 wrote:

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@Anonymous 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.

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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.....

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Good advice. As you allude to there are certain business credit cards from the major banks like Citi, Amex, Chase, and BoA that you will gt w/o the PG unless you are a fairly large sized corporation which isn't the case here.  You're neer going to get a Chase Ink Preferred or Amex business Platinum without the PG no matter how much other business credit that you have established.  Bit OT but I really wish they had BJ's around the DC area.  Looks like a great place to shop.

[Anonymous]

@Anonymous wrote:
That along with real FICO scores would help some of us help you.

experian.com lists my FICO 8 as 742. (I hope I'm not coming across as ungrateful: I really appreciate all the advice everyone has given... I'm learning heaps! Just bummed it isn't more straightforward / quicker. But hey, I accept that's just the way it is... c'est la vie!)

@Anonymous wrote:

what's your real goal and reason for wanting to build business credit?

@iph38 wrote:

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.

My real goal for building biz credit is so I can get investment property loans (biz liability only, no-PG). I thought getting biz CCs was a means to that end. But it sounds like Net30 / DUNS / Paydex gets me (part of the way) there as well, and is even a prerequisite for biz CCs anyway (or is for no-PG biz CCs).

Another thing that confused me there for awhile was that I thought a PG on a biz CC meant they always reported to my personal credit file. But that's not (always) the case right?

And how do Net30 accounts work exactly? I order something from Staples on a Net30 agreement, pay the invoice promptly, then...? Order more? How often do I need to order? Maybe I only need to place the first order? If so, how big (in $) does the initial order need to be? (Again, not being ungrateful, just curious how it all works!)

[iph38]

Most Net30 account report after 3 months, but could take longer and maybe even less, but some people use their Net30 account monthly and don't see reporting untill they call and get through to the correct person.  Surely you understand that building credit is a long slow progress with no shortcuts.  

When I finally received my first NO PG revolver, Amazon, I carried a small balance because I thought they'll want to see payments.  I went for a CLI and was denied because of low payment history on the account.  Further when I went for a CLI on another card, I was denied for payment proformance with another creditor, so that strategy screwed me twice.  So when you start getting revolvers, use them heavy and pay in full. 

Whatever your trying to do, you'll have limited options without a PG, but there are a few and like anything credit related, use, pay, repeat.....

[Anonymous]

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@Anonymous wrote:

@Anonymous wrote:
That along with real FICO scores would help some of us help you.

experian.com lists my FICO 8 as 742. (I hope I'm not coming across as ungrateful: I really appreciate all the advice everyone has given... I'm learning heaps! Just bummed it isn't more straightforward / quicker. But hey, I accept that's just the way it is... c'est la vie!)

@Anonymous wrote:

what's your real goal and reason for wanting to build business credit?

My real goal for building biz credit is so I can get investment property loans (biz liability only, no-PG). I thought getting biz CCs was a means to that end. But it sounds like Net30 / DUNS / Paydex gets me (part of the way) there as well, and is even a prerequisite for biz CCs anyway (or is for no-PG biz CCs).

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WIth that score you should be able to get BoA or Chase business cards simply by opening a business checking account, making a decent deposit ($5K-$10K) and applying for the card. BoA allows it all to be done online.  I am sure you could deposit less, but I would put $10K in the account if at all possible.

If your real goal is to get investment property loans in only the business name, then you are already on the right track.  That business is generally the domain of community banks.  I am not a real estate expert.   Enough collateral and enough loan size and you might get non recourse loans.  I would run all of my cash flow for those properties through the same bank that gave me the loan.

As for net 30 and starter accounts...  You are thinking inside the box.  A well developed business credit report helps the low level millenial credit analyst hide behind their keyboard and not have to ask you a bunch of questions they were taught in training class.  Conversely, an underveloped credit report is just as useful for getting it off their desk quickly.

[Anonymous]

@Anonymous wrote:

WIth that score you should be able to get BoA or Chase business cards simply by opening a business checking account, making a decent deposit ($5K-$10K) and applying for the card. BoA allows it all to be done online.  I am sure you could deposit less, but I would put $10K in the account if at all possible.

Really?  That would be great!  Do you think I could get a no-PG card that way?

[Anonymous]

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@Anonymous wrote:

@Anonymous wrote:

WIth that score you should be able to get BoA or Chase business cards simply by opening a business checking account, making a decent deposit ($5K-$10K) and applying for the card. BoA allows it all to be done online.  I am sure you could deposit less, but I would put $10K in the account if at all possible.

Really?  That would be great!  Do you think I could get a no-PG card that way?

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No.

[Anonymous]

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@Anonymous wrote:

@Anonymous wrote:

WIth that score you should be able to get BoA or Chase business cards simply by opening a business checking account, making a decent deposit ($5K-$10K) and applying for the card. BoA allows it all to be done online.  I am sure you could deposit less, but I would put $10K in the account if at all possible.

Really?  That would be great!  Do you think I could get a no-PG card that way?

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No, those cards would still have to be PGed.  You're not going to get Visas or MasterCards from the major banks without a PG unless you are a decent sized corporation which you and the rest of use are not.  The BJ and Sams Club MasterCards can be had without a PG once you have some established business credit.

[Anonymous]

The biz loans for property typically to get no pg require 30% or more down.  When we built the office building (small) class A we had pg. cross colatt. with the biz, and have the "owning" company  sign the pg as well.  Our building was  over $1 million 20% down, 60%  occuppied by enity related to owner We knew  the bank very well and our family was among the founders and owned 10% of the bank.  It was a pain. After 5 years we sold it. 

[Anonymous]

@Anonymous wrote:

No, those cards would still have to be PGed.

The type of guarantee (PG or no-PG), that's not reported to the credit file is it? So a lender I'm currently seeking a loan from has no way of knowing what kind of guarantee I gave the lenders holding my existing lines... right?

[Anonymous]

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@Anonymous wrote:

@Anonymous wrote:

No, those cards would still have to be PGed.

The type of guarantee (PG or no-PG), that's not reported to the credit file is it? So a lender I'm currently seeking a loan from has no way of knowing what kind of guarantee I gave the lenders holding my existing lines... right?

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These cards that require a PG do not report to your personal credit files unless you default but they do (depending on the creditor) report to your business credit file.  @Anonymous is more of an authority than I on which cards report to which credit bureau.  In my case, I have business cards from Chase, American Express and Bank of America and Citi.  I've only checked my Experian Business report and the Chase and Citi cards are the only two that report to it.  No idea if they report to other CRAs as I don't particularly care but Inverse probably knows the answer to that