What is Business Credit?
Building business credit takes time and most business owners don’t know the difference between personal credit and business credit. There are a lot of benefits when it comes to having business credit for your business. But what do you do if you have no business credit? Where do you start? In this article, we will discuss how to start building business credit.
Did you know that most lenders will review your personal credit before extending business credit?
Business Credit is reserved exclusively for people with a business. Business Credit can be used to pay for payroll, supplies, advertising, travel, financing of vehicles, and other business-related expenses.
This is originally why we started The Credit Repair Blueprint. I knew too many business owners who had bad credit because they were using their personal credit instead of keeping the two separated.
When their personal credit utilization gets too high it can lower their credit score.
Once your personal credit score is affected, it makes it harder to be approved for business credit.
In this blog we’ll explain how to get started with business credit so that you can be approved for more business credit in the future.
Related: All You Need To Know About Your FICO Score
Your business credit and personal credit aren’t linked —
Business and personal credit contains different information, so the scores aren’t necessarily correlated. But if you’re a sole proprietor, small business owner it’s a good bet that banks and other lenders will reference your personal credit to see how well you manage debt.
Related: The Easiest Ways To Increase Your Credit Score
So besides fixing your personal credit score what other steps can you take to build business credit.
Start Building Business Credit
When you start your business, you most likely have already registered your LLC, Applied for an EIN, and Opened up your first business bank account.
In case you haven’t formed your business type (LLC, C Corporation, S Corporation) you can do that through Inc Authority and they will do all the paperwork for you on how to form your business, get your EIN and Federal Tax ID.
If you haven’t already opened up your first business bank account check out The Credit Repair Blueprint to get detailed information on how to set up a business bank account, what you need to apply, and where to find the best banks for your type of business.
The Credit Repair Blueprint Course
Inside the course, there is also a list of over a dozen banks that offer new checking account signup bonuses that can pay hundreds of dollars just for opening a new business bank account. You’re not limited to one bank so you can have a couple of business bank accounts and earn hundreds of dollars for each account you open.
4. Steps to Building Business Credit
Besides applying for the LLC, EIN, and checking account the next step every business owner should do during this start-up process is:
1. Get a Duns & Bradstreet number.
This number is what creditors use to track your business credit history.
2. Track your business Credit for free
When you are starting to build your business credit there are two programs you should enroll your business in.
- Tillful – Tillful uses real-time transaction data from bank and credit card accounts. to apply their machine learning-based credit model to find patterns from cash flow data in order to accurately assess business credit scores.
- Nav – Nav makes it easy to see your business financing matches all in one place, plus offers advice from experts on your recommended next steps.
These sites help give you optics on your business to see your business credit score and also what credit cards and funding options you have available to you, before you go and apply and get declined for a card you might not get approved for if your company is too young.
3. Net-30 Vendors That Report to Commercial Credit
When starting out building your business credit it takes time, and some credit cards might not begin to approve you until your business has been established for 60 days up to 12 months.
Net-30 Vendors are businesses that report to the business credit agencies and can help you establish business credit faster.
Just make sure to always pay your vendors back early!
Here is a list of 3 vendors that have a history of approving new businesses for tradelines.
1. Creative Analytics
Creative Analytics extends NET 30 business credit terms to new and established businesses. They allow approved business accounts to pay later (within 30 days) for products and services purchases today.
Creative Analytic NET 30 Tier 1 accounts are reported to commercial credit reporting agencies to help build credit. You can complete the application online and there is a $79 annual fee.
Requirements to Apply:
- Must operate in the United States
- Must have a tax ID number and DUNS number
- Established for at least 30 days
- Have no delinquencies or derogatory business reporting
2. Shirtsy
Shirtsy is a direct to garment on demand printing company that allows you to customize, design and fulfill T-shirts, business cards and other accessories.
The best part about having a net-30 with shirtsy it reports to all major business credit bureaus including Experian, Equifax, Credit Safe, SBFE, Ansonia and NACM
The application can be done online and they reply very fast.
Shirtsy is eager to work with both new and established businesses.
There is no personal credit check. Shirtsy’s Net 30 Membership comes with an annual fee of $99 to access reporting.
To qualify for net 30 terms, a business must meet the following criteria:
Must operate in the United States.
At least 90 days old.
No derogatory credit or delinquencies.
Must have EIN (Tax ID for business).
Important: When filling out an application, Shirtsy recommends you double-check that all of your information is correct. Address and EIN are most important. A simple typo will reject your application so please take your time.
3. Grainger
Grainger offers Over 1.6 million industrial and safety products
Reports to: business credit bureaus
Worth noting: While a Grainger account is generally easy to get, some business owners have reported that they were unable to qualify immediately because they had no business credit references, or because their business was just recently incorporated.
This is where being persistent is important; some found they were able to talk with a representative to establish credit terms, while others had to start with other net-30 vendors then come back to grainger.
4. Uline
Products offered: Packaging, janitorial, food service, safety warehouse supplies and more
Reports to: Experian (business) and other business credit bureaus
Worth noting: Most business owners report success opening a credit account with Uline. If your business is young and you have trouble qualifying, you can contact their credit department.
4. Open up a new business credit card.
Just like with personal credit, opening up new credit cards can help your business grow its business credit history. If your company is young, (less than 6 months) you may have trouble qualifying, but if your personal credit is good or great then you are more likely to be approved.
Related: What is a good credit score?
If you need help with increasing your personal credit score sign up for our Credit Repair Blueprint Training course to learn how to fix your credit score today.
If you have good to excellent credit you will want to apply for these 3 best business credit cards.
How To Get $50,000 – $250,000 Business Credit Lines
As a business you want to get large amount of business credit lines so you can continue to grow your business, advertise to customers, hire employees, buy the equipment you need and so much more. Fund & Grow helps business owners of all industries, and real estate investors get the funding they need for their business.
Fund & Grow Business Funding
Fund & Grow has two programs you can get business credit up to $150,000 in 30 days through low-interest, unsecured business credit.
Up to $250,000 Business Card Stacking Membership
- Up to $250,000 of cash available business credit
- 12-Month business credit membership
- Up to $100,000 of corporate credit accounts
- 12-Month corporate non-recourse membership
- No minimum FICO Score required
- 60 day Money Back Guarantee
- No back end fees
- Payment plans available
- Dun & Bradstreet PAYDEX Corporate Credit Building Program
Pay After Credit Is Received- Card Stacking
- Only pay 9% after funding is established (you can pay with credit received)
- $1.00 confirmation charge to get started
- 730 FICO Score or higher required
- $10,000 – $20,000 combined bank credit card limits (exceptions are made on a case by case basis)
- Credit counselors will review your credit profile then provide your prequalification amount.
3 Best Business Credit Cards
Here are 3 business cards that you should consider if you are applying for business credit. (If you get denied for one card, it’s okay to try another card, but if you get denied for two cards in a row give your credit more time to season if your business is less than 60 days old or you might need to enroll in our credit repair blueprint training to understand why you are being denied for business credit.
Related: Best Business Credit Cards With Rewards
What Business Credit Cards Report To Credit Bureaus
In general, business cards that are current and have a positive standing are reported to one or more business credit bureaus.
(Discover and Capital One (for most cards) will report positive small business credit card activity to the personal credit bureaus as well.) (These cards can also impact your personal credit utilization rate)
Negative accounts (late payments and collections) will usually be reported to the personal consumer bureaus, and may be reported to the business credit bureaus as well. (Some issuers report a bit differently.)
Some may wait until the account is 60 days past due, for example, while others may report it sooner.
Please note: Card issuers do not always publicly disclose the bureaus to which they report card activity, and issuer reporting policies can change.
The following data about where credit card issuers report business card activity is accurate to the best of our knowledge, based on information provided by the card issuers and our own research. Your experiences with business card reporting may differ from what we list below.
| Issuer | Positive Reportes | Negative Accounts |
|---|---|---|
| American Express | Small Business Financial Exchange | Dun & Bradstreet Consumer Credit Bureaus |
| Bank Of America | Small Business Financial Exchange | Consumer Credit Bureaus |
| Barclays | N/a | Consumer Credit Bureaus |
| Capital One* | Dun & Bradstreet Experian Business Small Business Financial Exchange Consumer credit bureaus (most cards; personal credit impact) | Consumer credit bureaus |
| Chase | Dun & Bradstreet Equifax Business Experian Business Small Business Financial Exchange | Consumer credit bureaus |
| Citi | Dun & Bradstreet Equifax Business Experian Business Small Business Financial Exchange | Dun & Bradstreet |
| Discover* | Equifax Business Experian Business Dun & Bradstreet Consumer credit bureaus (personal credit impact) | Consumer credit bureaus |
| USAA | N/A No Business Cards | N/A |
| U.S. Bank | Equifax Business Dun & Bradstreet | Consumer credit bureaus |
| Wells Fargo | Small Business Financial Exchange | Consumer credit bureaus |
How To Build Business Credit When You Have Bad Personal Credit
If you have poor personal credit you may be struggling with getting the financing your business needs. Poor personal credit can make building a business more challenging. Credit history plays a big part in your ability to scale and grow your business.
5 Steps To Building Business Credit When You Have Bad Personal Credit
2. Get Dun & Bradstreet
3. Apply For Tradelines
4. Consider a Secured Business Card
5. Apply For Working Capital Loans
Related – Credit Saint Features, Pro’s And Con’s
Final Thoughts:
The thing to remember about starting off building Business credit is that takes time
Even if you never plan on taking out a loan or tapping a line of credit, it can’t hurt to build your business credit.
In fact, your business insurance premiums, equipment or office lease agreements, and even your ability to work with other companies could be influenced by your business credit.
The good news? You can take steps on the items above to build your business credit even if your personal credit isn’t great. And once you’ve established good business credit, you may be able to qualify for financing without a personal guarantee.
That is why it is important to start as soon as you start a new business.
The sooner you start the faster you’ll be able to leverage the credit.
With Great Business Credit you can even get approved for credit cards with cash back rewards, sign up bonuses and interest free access to money for months and months.
Do you know a business owner that just started a company or is trying to build their business credit.
Share this article with them and spread the word!
Do you have bad credit, no credit, or want to learn how to become a credit expert?
Check out our credit repair training and learn:
- What your actual credit score is
- How to get a copy of your free credit report
- How to get your credit back on track today
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- Learn how to fix your credit on your own with our expert advice.
