When people hear the term “business tradelines,” they often think of credit cards. However, that is only one type of business tradeline. In this blog post, we will answer questions like what a business tradeline is and how to get one. We will also talk about net-30 accounts (which can be used as a business tradeline) and more!
What Are Business Tradelines?
A business tradeline is a credit account between the business and a vendor. Business tradelines can be different things, such as:
- an account to collect payments from customers (like credit card accounts)
- trade line of credit for short term financing.
- A company’s buying power with suppliers and vendors such as the ability to order goods on 30 days (net-30 accounts)
Business tradelines are crucial for your business success as these tradelines help you build business credit and provide information about how you and your business handle credit and financials. Without this credit informations, banks and lenders may not lend to you or let you open new accounts that your business might need.
Dun & Bradstreet (D&B) produces a PAYDEX Score that analyzes your business credit just like the the FICO score for your personal credit. The PAYDEX Score requires three tradelines in order to calculate a score. There are three business credit bureaus that make up your credit score.
Related: FICO Score: All You Need To Know
Who Are The Business Credit Bureaus?
The three major business credit bureaus are:
Experian and Equifax are also two of the three major personal credit reporting agencies however, your personal and business credit files are separate. You can view your three business credit scores individually at each business credit bureau or access them all through Nav.
Another option you can use to view your business credit score is Tillful. Tillful offers free real-time transaction data from your bank and credit card account which will analyze your business credit score.
With Tillful, you can also apply for a credit card to build your business credit and get funding for your business.
Where Does The Credit Bureaus Get Information From?
The business credit bureaus collect their information about a business through many different sources in order to create business credit reports. The business credit bureaus gather information from:
Dun & Bradstreet and Equifax pulls their business reports from the Small Business Financial Exchange (SBFC) where they get information about business credit cards.
- Public Records – Liens, Bankruptcies, Incorporations, Judgements, etc.
- State, City, and County Business Regulations
- Suppliers, Creditors, Vendors and other companies
- Press Releases and News/Media Stories
- Corporate Financial Reports
- UCC Filings
- Internet Web Mining
- Self-Reported Data – Interviews
- Federal Government Contracts, Loans, and Grants
- Print Directories
After the business reporting agencies collect this information about your business they review it and create a business credit score. This business credit score will be used by all lenders, credit card companies and business vendors to see if your business is worth giving money to.
What Is A Business Credit Score?
A business credit score is similar to personal credit scores, as the credit repair agencies collect your financial information about your business to determine if you are a good fit to loan money to and pay it back.
There are three main business credit scores used by business lenders:
- PAYDEX Score (Dun & Bradstreet)
- Intelliscore PlusSM (Experian Business)
- FICO Liquid Credit Small Business Scoring Service
While your business credit score is similar to your personal credit score they are not the same and should be separate.
Related – What is Credit Saint And It’s Features?
How To Register My Business With The Credit Bureaus?
Registering with the major business credit bureaus is something you might need to do before you receive a credit report and score. Here is how you can register with each business reporting agency.
Dun & Bradstreet
To register with Dun & Bradstreet you will need to apply for a DUNS number for your company, which is what you will need to start building business credit.
- Go to the Dun & Bradstreet website and apply for a free DUNS number.
- You might have to wait up to 30 days to receive a DUNS number.
Some vendors that report to Dun & Bradstreet are:
- Advanced Auto Parts – Apply at the nearest location to you
- Valvoline – Apply over the phone at 1-800-637-1462
- Zoro – Apply over the phone at 1-855-289-9676
- Industrial Fans Direct – Apply online
- CDW – Apply over the phone at 1-800-800-4239 option 4
Experian Business
With Experian business you need to register your business to be eligible for a credit report, however you will need to establish business credit with creditors who report to Experian.
Some companies that report to Experian Business that you can create an account with is:
- Northern Tool (NET-30)- Apply over the phone at 1-800-556-7885
- Home Depot Pro, Supply Works (Net-30)- Apply over the phone at 1-866-412-6726
- Murphy USA (Net-15) – Apply over the phone at 1-800-950-6128
- Tiger Direct (Net-30) – Apply online or over the phone at 1-800-364-9485
- 7-Eleven (Net 15) – Apply over the phone at 1-866-910-7991
Experian charges a fee to check your business credit score report of $39.95 and up but you can check it for free with your Nav account as well.
Equifax Small Business
Similair to Experian, Equifax Small Business doesn’t have a way for you to register with them instead you will need to establish business credit with a lender that reports to Equifax Small Business.
Some vendors that report to Equifax Small Business include:
- Shirtsy (Net-30) – Apply online
- Creative Analytics (Net-30) – Apply Online
- Business Tshirt Club – Apply Online
- Summa Office Supplies (Net-30) – Apply Online
- Nav Business Boost – Apply Online
Related: How To Get Business Funding With Bad Credit
How To Get A Business Tradeline?
Some businesses already have one, but if you are a new business or don’t have any yet, it is important to establish your creditworthiness before applying for a new account. This will allow the lender or vendor to assess whether you meet their criteria and are likely to repay what they lend you (i.e., whether they will be able to collect on the debt). They may require you to have one or more of these:
- a trade account with them, which can include accounts such as an agency agreement;
- an open purchase order that has been fulfilled (i.e., delivered); and/or
- invoices for work completed and not yet paid for.
Related: What Are Tradelines?
Where To Get A Tradeline That Reports To Your Business Credit
To get a tradeline, you will need to establish an account with the vendor or borrower of your choice. You may be able to use one of your current accounts as a balance sheet (i.e., assets) in order to cover any expected shortfalls from other obligations during this process. Not all vendors or tradelines that you open report to your business credit, so it’s important to know which accounts you should open in order to build your business credit.
Tillful offers a business credit score that not only shows you your business credit score but also shows you a real time reflection of your business’s financial health.
They pull data from bank and credit card accounts and finds patterns from cash flow data in order to accurately assess business credit scores.
Check Your Tillful Credit Score Here!
What Are Net-30 Accounts?
Net-30 accounts are business vendors that allow you to make purchases with that vendor and they give you 30 days to pay the amount back in full.
For example, Creative Analytics is a company that offers products and services such as tools, computer accessories, health and fitness products, office supplies, social media marketing, digital downloads, website design and so much more. You can purchase any items you need for your business now and they will give you 30 days to pay.
Opening net-30 accounts are the first step in establishing business credit as most vendors don’t check your business credit score.
With these net-30 accounts, you should purchase items every month to help increase your business credit score and always pay in full every month. If you miss a payment or don’t pay for the account in full it can negatively impact your business credit score which can reduce your chances of applying for business credit cards, getting funding for your business and business loans.
To get started with business credit, applying for accounts with net-30 vendors that report to the credit bureaus is a great starting place. Here are some Net-30 Vendors that report to the credit bureaus:
Learn more about these net-30 accounts and a guide to how to build business credit here.
Best Business Tradelines To Apply For
After you have successfully opened some net-30 accounts with vendors and have made monthly purchases for an extended period of time it’s time to start thinking about upgrading to bigger and more established tradelines.
Some of the best business tradelines to open are business credit cards and store accounts. With these established business tradelines you will be able to get more funding for your business, increase your business credit limits and grow your business.
These are some of the best business tradelines to open for business credit cards and funding:
- Chase Ink Business Cash
- Capital One Spark
- American Express Business Platinum
- Fund & Grow – $50,000 to $250,000 Business Credit Lines
Related: The Best Business Credit Card For Bad Credit
6 Tips To Increase Your Business Credit Score
In order to increase your business credit score you should follow these tips for success and grow your business exponentially.
- Always Pay Accounts On-time – No matter if you have net-30 accounts or business credit cards you should always make your payments on time to all vendors or creditors. Missing payments can lower your business credit score.
- Don’t Spend More Than You Have– You don’t have to go into debt trying to establish business credit. Start with a small purchase with your net-30 vendors and pay in full each month. The more money your business makes the more you can spend but don’t overextend yourself.
- Net-30 Balance – The credit limits on your net-30 accounts do not appear on credit reports instead the highest balance will be reported.
- Vendor Names Will Not Show Up On Your Business Credit Report – The business type will report on your business credit report instead of the vendor name. You will need to keep track of all the accounts you have opened and when so that you can match them to your credit report.
- It Can Take Months To Report – Some accounts can take 30 days to 60 days before they show up on your business credit report. Monitor your accounts and if you don’t see the payment history by the third month contact the vendor to confirm everything is correct.
- New Accounts Might Lower Your Score– Just like your personal credit score, opening new business accounts might lower your business credit score temporarily. You should see a positive impact on your credit score over time as the business tradeline ages.
- Increase Your Personal Credit Score– if you have been denied for any tradelines or net-30 accounts double check to make sure all your business information is correct such as your LLC, EIN, address, phone number, ect. If everything is correct you might want to focus on your personal credit as some creditors will check your personal credit to verify you and get a better picture of your financials. You can hire a credit repair company to help you or take a DIY Credit Repair Course like The Credit Repair Blueprint.
Conclusion
Business tradelines are essential to start establishing business credit. Register to the business credit bureaus, set up net-30 vendors and find accounts that report the credit bureaus.
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