With most business credit cards you need to have good CONSUMER credit to get approval. But what if your personal credit isn’t good and you don’t have a guarantor? This is when BUILDING BUSINESS CREDIT makes a ton of sense. Even if you have good personal credit,
building your business credit helps you get more money and without a personal guarantee.
Business credit is credit in a business name, that’s linked to the business’s EIN number, not the owner’s SSN.
How to Start Building Business Credit
Most consumer credit starts with secured credit cards or an account with a well-established co-signer. But co-signed accounts and secured accounts really aren’t popular or widely used in the business world. Most business credit starts with VENDOR accounts instead.
VENDOR accounts are accounts that often offer terms like Net 30, instead of revolving so if you get approval for $1,000 in vendor credit and use all of it, you must pay the money back in a set term like within 30 days on a Net 30 account.
You must pay a Net 30 account in full within 30 days.
In contrast, you must pay a Net 60 account in full within 60 days. Unlike with revolving accounts, you have a set time to pay back what you borrowed or the credit you used.
To start your business credit profile the RIGHT way, you need approval for vendor accounts that report to the business credit reporting agencies.
Once you’ve done this, you can then use the credit, pay back what you used, and the account gets reported to Dun & Bradstreet, Experian, or Equifax. Once reported, then you have tradelines, an established credit profile, and an established credit score.
Using your newly established business credit profile and score, you can then get approval for retail credit, and eventually retail credit without needing to supply your SSN or personal guarantee.
This is possible because now your EIN credit profile is established and can stand on its own. So, if you leave your SSN off of the application, the credit issuer then pulls your EIN credit, sees a solid profile and score, and can then approve you for real revolving credit.
Contact us today to get business credit for your business.