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How to build business credit

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SouthJamaica
Mega Contributor

Re: How to build business credit


@lindsaydruart wrote:

Ok....I've done this about....4 times now. Starting and failing at businesses (finally successful) so follow along carefully.

 

1. Open Net Terms Accounts

 The easiest accounts to get are Quill, Uline, UPS, and FedEx. Quill and Uline definitely report to D&B and you can use them to order just about anything you might need of your home office/office. This builds a file for you in D&B even if you don't have a number yet.

 

2. Get a D&B number

It's Free! but D&B will try to sell you everything in the world. Stick to your guns and keep yelling free.

 

3. Use your net tradelines monthly and pay right after you order and get invoiced.

Buy something small. I use Quill for toilet paper and Uline for window cleaner and paper towels. This will boost your Paydex to 80 (pays on time) very quickly.

 

4. Wait 3-6 months and app for business store cards WITHOUT Personal Guarantee

The easiest is Office Depot, BP, Shell, Staples. It maybe too early in the game but you can also try Sam's Club Business Credit/Mastercard or BJ's World Perks for Business Mastercard. Once you apply for a business card with Citibank (Office Depot, Shell, Staples), your Experian and Equifax business credit files will start as there will be business inquiries. You will likely get approved from your D&B info but you may have to rinse and repeat on 3 for a litle longer for the Mastercards.

 

5. Use your new store cards, Pay your bills, and don't PG if you can help it.

I made the mistake of PGing a secured card with Wells Fargo BEFORE I built the trade lines on my current business and I got stuck with a card with a low limit that is actually hurting my business credit due to util on that card. Wait until after your business can stand on it's own profile for a few major bank cards. After 6 months or so with your tradelines and store cards, app for the Capital One Spark (any of them) or any Amex Business card that fits your spending patterns.

 

Note: If you app and get approved for your first Synchrony Bank card (Sam's, Lowes, Amazon, etc) the doors open wide and invite you in. Three months of good payment and history with the first card and they'll approve you for the others.

 

This usually takes a year from beginning to end but can happen sooner. Good luck!

 

 


I already have (a) a Spark card since 2012, (b) Amex Business Platinum card since 2014, (c) NewEggs 55 day net program run by Synchrony and (d) New Egg 30 day net.  Does that change anything as to what I should be doing next?


Total revolving limits 741200 (620700 reporting) FICO 8: EQ 701 TU 704 EX 685

Message 11 of 36
SouthJamaica
Mega Contributor

Re: How to build business credit


@lindsaydruart wrote:

You are welcome! Make sure to remember your big banks will want PGs so don't PG on a store card. If they tell you to PG, wait it out and garden your current accounts.

 

And despite the horrible payment terms for the BP Universal Mastercard, get it anyway. It's no PG required and it's a helpful tradeline to fill out your report. Pitney Bowes is another one that people see as worthless but it helps if only for the year to get the no PG Mastercard

 

Also, if you get declined for something REQUEST YOUR CREDIT FILE FOR FREE. It's the same as if for personal credit. Equifax requires you to call and they mail it to you. Experian does it on the website for a fee but you can call and get them to mail it. D&B is a tricky one but most of those that give you decline letters aren't going to say it was from D&B as most creditors use D&B AND EX or EQ.

 

EQ Business Solutions - 800-727-8495 (Just called today to get mine so I know it's right)

EX Business Solutions - (I'll verify and find it)


Thank you so much.


Total revolving limits 741200 (620700 reporting) FICO 8: EQ 701 TU 704 EX 685

Message 12 of 36
lindsaydruart
Established Contributor

Re: How to build business credit

What's your business? With the NewEgg's I'm assuming you are doing something tech related. Since you already have the big banks, your next step really should be LOCs or loans for expansion. You don't really need the store cards to force reports. You do need more tradelines though. I would say next step should be an LOC with the bank you bank with, Sam's Mastercard, Chase Ink, and maybe D&H if you are truly a hardware retailer (as I am thinking). D&H most definitely reports to D&B but their line of credit is hard to get.

Gardening since 12/15/2019. Goal 12/15/2021
FICO 8 as of 12/16/2019 - EQ 602 EX 656 TU 628
Message 13 of 36
red259
Super Contributor

Re: How to build business credit


I have a sole prop and have two chase ink cards and an amex business spg card for the business. By having these cards does that create a business credit report for my business or does it need to be an actual business entity vs a sole prop to have a business credit report?

;
Starting Score: EQ: 714, TU 684
Current Score: EQ: 725 7/30/13, TU 684 6/2013, Exp 828 5/2018, Last App 8/5/17
Goal Score: 800 (Achieved!) In garden until Sepetember 2019
Message 14 of 36
lindsaydruart
Established Contributor

Re: How to build business credit


@red259 wrote:

I have a sole prop and have two chase ink cards and an amex business spg card for the business. By having these cards does that create a business credit report for my business or does it need to be an actual business entity vs a sole prop to have a business credit report?


This does create a file, however, being a sole prop requires you to PG everything, especially if you don't have an EIN which can hurt your personal credit if you ever default on a business credit card. LLC that business up as a sole member and don't pay one of those LLC services to do what you can do for free.

Gardening since 12/15/2019. Goal 12/15/2021
FICO 8 as of 12/16/2019 - EQ 602 EX 656 TU 628
Message 15 of 36
red259
Super Contributor

Re: How to build business credit


@lindsaydruart wrote:

@red259 wrote:

I have a sole prop and have two chase ink cards and an amex business spg card for the business. By having these cards does that create a business credit report for my business or does it need to be an actual business entity vs a sole prop to have a business credit report?


This does create a file, however, being a sole prop requires you to PG everything, especially if you don't have an EIN which can hurt your personal credit if you ever default on a business credit card. LLC that business up as a sole member and don't pay one of those LLC services to do what you can do for free.


There are fees with having an LLC and it can add up to quite a bit (part of this is based on my location though). The benefits of the LLC for me would be limited due to my kind of work

;
Starting Score: EQ: 714, TU 684
Current Score: EQ: 725 7/30/13, TU 684 6/2013, Exp 828 5/2018, Last App 8/5/17
Goal Score: 800 (Achieved!) In garden until Sepetember 2019
Message 16 of 36
OMW2_HighAcheiver
Established Contributor

Re: How to build business credit

Bookmarked!
Great info!




Message 17 of 36
Anonymous
Not applicable

Re: How to build business credit

Which company is better to work with with mailings...PitneyBowes or Stamps.com

Message 18 of 36
Anonymous
Not applicable

Re: How to build business credit

Im a newbie on this forum but have asked for info three times and have received no response am I doing something wrong?

Message 19 of 36
lindsaydruart
Established Contributor

Re: How to build business credit

Nope. Sometimes people don't know the answer. Pitney Bowes has a credit account that reports to bureaus. Stamps does not. If you want cheap postage go with Stamps. If you want the credit, Pitney Bowes.
Gardening since 12/15/2019. Goal 12/15/2021
FICO 8 as of 12/16/2019 - EQ 602 EX 656 TU 628
Message 20 of 36
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