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Advice on building business credit sought

Expansion
New Contributor

Advice on building business credit sought

Back in 2017 I did a ton of research into business credit building, started building business credit, and then redirected my energy elsewhere.

 

Revisiting my research, I'm sensing that a lot has changed, and a lot of the resources available even now are out of date.

 

I could use some suggestions for what actions to take next.

 

My business is an S corp

In business since 2003

Incorporated 2014

business bank account started 2016

annual revenue about $100k

 

Back in 2017, I got my D&B number

and also set up and started using net 30 accounts with:

Quill

Uline

Grainger

and Discount School Supply.  

 

I think I just got discouraged because I had a hard time finding net 30s where I could buy things I actually used.  And then it hit a point in 2017 where I really couldn't stomach buying stuff I didn't need.

 

I'm open to doing some PGs to get started.  I'm aware of the risks.

 

I just applied for a Home Depot Commercial Account.  And also applied for Torpago since I think I meet their criteria.

 

1.  If there's an up-to-date thread with step-by-step actions I'd love to see it, I haven't been able to dig one up.  I've read through Business Credit 101 thread here on this forum, but even though it's super helpful, since it dates back to 2007 I know parts are out of date.

 

2.  Specific recommended actions in my situation?  

 

 

Message 1 of 29
28 REPLIES 28
FinStar
Moderator

Re: Advice on building business credit sought

How's your personal credit profile? How long has it been established and what kind of ballpark scores do you have?  How often do you use your current net30 accounts?

Chances are you can qualify for better CC products without a PG. Are you interested in building your business credit profile for larger purchases, other business investments, have better flexibility for working capital/cash flow or...?

Unfortunately, there isn't any updated 'Business Credit 101' particulars, but depending on your business needs, the community can point you in the right direction.

Message 2 of 29
Expansion
New Contributor

Re: Advice on building business credit sought

Hey FinStar!  Thank you for these excellent questions!

 

My personal credit profile is ... OK. 

 

Established since 2003. 

 

651 Equifax, 675 TransUnion, not sure about my Experian. 

 

What's tanking my personal scores is high utilization due to a really rough period a while back where I had to use my credit cards to cover my butt.  But my scores are slowly recovering with time.  (I think I just crossed the line from "not good" to "good" with TransUnion.)  My payments are always on time. 

 

So you're right that I can probably get better approvals without a PG.  

 

I haven't really used my net 30 accounts since 2017.   But I'm open to reactivating them, or re-starting them.  

 

I'd say my overall goal is just to have healthy balanced credit.  Being able to make purchases and have a credit entity that's not just all under my personal credit.   Having business credit to buy a new computer when I need one, without needing to put it on my personal cards.  That kind of thing.  

 

Message 3 of 29
FinStar
Moderator

Re: Advice on building business credit sought


@Expansion wrote:

Hey FinStar!  Thank you for these excellent questions!

 

My personal credit profile is ... OK. 

 

Established since 2003. 

 

651 Equifax, 675 TransUnion, not sure about my Experian. 

 

What's tanking my personal scores is high utilization due to a really rough period a while back where I had to use my credit cards to cover my butt.  But my scores are slowly recovering with time.  (I think I just crossed the line from "not good" to "good" with TransUnion.)  My payments are always on time. 

 

So you're right that I can probably get better approvals without a PG.  

 

I haven't really used my net 30 accounts since 2017.   But I'm open to reactivating them, or re-starting them.  

 

I'd say my overall goal is just to have healthy balanced credit.  Being able to make purchases and have a credit entity that's not just all under my personal credit.   Having business credit to buy a new computer when I need one, without needing to put it on my personal cards.  That kind of thing.  

 


Sure, anytime.

 

Ok, so it sounds like you've had a long, established history and your credit scores are definitely improving on the personal side of things, so that's a plus. The reason I mention this is because a variety of the major banks who issue some of the most popular business cards will pull personal credit. So, having a decent foundation there helps. Granted, once approved they won't report to your personal credit reports, unless accounts go into default.

 

With that being said, can you share some of your current lenders, on the personal credit side? How's your overall utilization looking at the moment?

Message 4 of 29
Expansion
New Contributor

Re: Advice on building business credit sought

Sure!  I've got cards with Santander, Barclays, Mercury, Chase, Citi, Amex, NavyFed, Bank of America, Wells Fargo, and Credit One.

 

The overall utilization is really bad.  Like 90%.  All going back to the really rough period where I just had to use my cards to cover emergencies.

 

Miraculously, on the personal side, I was approved for an Upstart loan a few months back at a decent rate, which I used to consolidate my highest-rate cards.  So with Chase and Credit One my utilization is 0%.  But I know it's more about the overall utilization.  

 

That's part of why I'm interested in building my business credit - just having a separate entity where I can start with a clean slate, and potentially build faster than on the personal side, where it has been steady but often feels realllllly slow.  

Message 5 of 29
FinStar
Moderator

Re: Advice on building business credit sought


@Expansion wrote:

Sure!  I've got cards with Santander, Barclays, Mercury, Chase, Citi, Amex, NavyFed, Bank of America, Wells Fargo, and Credit One.

 

The overall utilization is really bad.  Like 90%.  All going back to the really rough period where I just had to use my cards to cover emergencies.

 

Miraculously, on the personal side, I was approved for an Upstart loan a few months back at a decent rate, which I used to consolidate my highest-rate cards.  So with Chase and Credit One my utilization is 0%.  But I know it's more about the overall utilization.  

 

That's part of why I'm interested in building my business credit - just having a separate entity where I can start with a clean slate, and potentially build faster than on the personal side, where it has been steady but often feels realllllly slow.  


The utilization can definitely be something that would need a little TLC, but it's definitely doable.  We have a great community that can help formulate some strategies for how to get it to a more ideal level. If you would like, you can always start a thread in our General Credit section of the forums by listing your current cards, balances, limits and APRs and we can share some tips on how to improve that area. This is purely optional, of course, but I believe it can help -- only if you wish.

 

Based on what you've shared, it appears you're very diversified as far as lenders go. So, there's some good options to test things credit-wise to determine where you stand at the moment. For instance, you already have a personal AmEx relationship, if you were to try to select a personal card while logged into your account (you can select something like Cash Magnet for example) and click the Apply button (without finalizing anything), the system will determine if you are pre-approved for that particular one. If so, that's a good indicator that you could potentially be approved for an AmEx business credit card. If no pre-approved language displays, that's ok, you can exit/cancel the application -- no harm no foul. This doesn't impact your credit profile at all.

You can also test the waters by doing a pre-qualification with FNBO's Evergreen business card. You can fill out the form to see whether you pre-qualify (this will be SP) -- there will not be a HP for just checking. If there are no offers, no worries. We're simply testing the waters.

 

https://www.fnbo.com/small-business/credit-cards/evergreen/


Another thing that I'll mention is that if no pre-qualified offers pop up, that's ok. Don't let that discourage your path to getting to the business cards you want. Some things just take time.

Message 6 of 29
Expansion
New Contributor

Re: Advice on building business credit sought

Thank you so much for these very specific suggestions, FinStar!

 

I went into my AmEx account and when I clicked on "apply" for the cash magnet card, I got a screen asking for full name, total annual income, non taxable annual income (optional), and total financial assets.  Then there's an "agree and submit" button.   Does that mean that there's no pre-approval?  

With Evergreen I got a "join our waitlist" signup box.  

Any thoughts on what to try next?

Message 7 of 29
Expansion
New Contributor

Re: Advice on building business credit sought

PS.  I just calculated my exact current utilization on my personal cards and it is 85.6% - better than I thought!!  Below 90, hooray!!

Message 8 of 29
Expansion
New Contributor

Re: Advice on building business credit sought

FinStar, I posted as you recommended over in General Credit.  The advice I got so far wasn't particularly helpful, so I might take the post down, but I wanted to get your feedback first, if you get a chance to look at it.  No pressure.  Thanks for all your help so far.   

 

And just for some context, my situation is very stable -- my business is full with a waitlist, my income has been steadily growing, I haven't needed to add anything to my credit card balances for a couple of years, and I haven't applied for any new credit except the upstart loan in 2021 and the business credit that we've talked about so far on this thread.  

Message 9 of 29
FinStar
Moderator

Re: Advice on building business credit sought


@Expansion wrote:

FinStar, I posted as you recommended over in General Credit.  The advice I got so far wasn't particularly helpful, so I might take the post down, but I wanted to get your feedback first, if you get a chance to look at it.  No pressure.  Thanks for all your help so far.   

 

And just for some context, my situation is very stable -- my business is full with a waitlist, my income has been steadily growing, I haven't needed to add anything to my credit card balances for a couple of years, and I haven't applied for any new credit except the upstart loan in 2021 and the business credit that we've talked about so far on this thread.  


I see that some newer posts from some very helpful folks have started guiding the discussion in a positive direction. Once the utilization numbers start to make some meaningful impacts (credit scores-wise), we can revisit your business credit needs.

 

The issue that we might run into is that if you haven't used your existing business net30 accounts, it's possible that some lenders may require a PG if business credit profile has been dormant for a while, unless you've used them recently.

Message 10 of 29
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