Building Business Credit

When applying to most Business Credit cards you need to have good consumer credit in order to get approved. But let’s say your personal credit isn’t that good and you don’t have a guarantor?

What can you do?

This is when building Business Credit rating makes a ton of sense. Actually, if you have good personal credit, building your Business Credit can help you get even more money… minus a personal guarantee. Business credit is credit in business name, that’s associated to the business’s EIN number not the business owner’s SSN. Once it’s done properly, business credit can be acquired with no personal credit history checking and no personal guarantee… something all other cards stated cannot deliver.

How to Start Building Business Credit Rating.

Most of the time, consumer credit rely upon secured credit cards or an account that has a well-established co-signer. But co-signed accounts and properly secured accounts are not necessarily widely used or popular in the business world. Virtually all Business Credit will depend on vendor accounts instead.

What are Vendor Accounts?

Vendor accounts are accounts that ordinarily offer conditions such as Net 30, rather than revolving. So if you get approved for $1,000 in vendor credit and use all $1,000 you would have to pay that money back within whatever term was arranged at the time of approval. A Net 30 account would need to be paid entirely within 30 days.

On the other hand, a Net 60 account must be paid in full within sixty days. You have a set amount of time you must pay off what you obtained or the credit you used unlike with revolving accounts.  In order to get started on your Business Credit profile the CORRECT way, you need to get approved for vendor accounts that are accountable to the Business Credit agencies. Once you have done this, you can then use the credit, pay back what you used, and the account leads to being reported to Duns & Bradstreet, Experian, or Equifax. Once reported, you will have tradelines, an established credit account, and an established credit score. Working with your newly established Business Credit profile and credit score, you will be able to get approved for credit, and eventually store credit while not having to supply your SSN or personal guarantee.

This is certainly possible because now your EIN credit profile is made, and can stand on its very own. So if you leave your SSN off of the application, the credit issuer then pulls your EIN credit, recognizes an excellent profile and credit score, and can then approve you for real revolving credit.

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