Great Info for Building Business Credit!

How to Build Business Credit with Bad Personal Credit?

Personal credit is one way a company decides your creditworthiness. By assessing your past payment history, a company can decide how risky it would be to extend credit to you. Business credit works the same way. If your personal credit is tarnished, this can be detrimental to you. Although business credit is often built on your personal credit, you can build business credit without relying on your negative personal credit history.

Steps to Follow:

1. Establish your business as a separate entity. Obtain a tax identification number instead of using your social security number. Apply for this number on the Internal Revenue Service website.

Establish a separate telephone number. List the number in the telephone directory so it can be easily verified. Obtain a separate business mailing address as well.

Open a separate business banking account. Take your tax identification number and any business licenses or incorporation paperwork to the bank when you apply for the account.

2. Apply for trade credit with your suppliers. This is the easiest kind of credit to obtain, so consider starting with this type of creditor. For example, office supply stores.  At: www.theredspectrum.com,  offers small lines of business credit to newly opened businesses.

3. Pay your account balances on time or early for the next six months. As the credit reporting agencies report your accounts in good standing, your business credit will increase.  

4. Apply for business credit with retail stores, such as Wal-Mart or Lowes. Base your applications on the business credit you established in Step 1. Do not overextend your credit. Applying to numerous companies at the same time can damage your business credit. Apply for no more than three to four credit lines every six months to be safe.

5. Monitor your business credit. Order a copy of your business credit report every year. Obtain this report from the major credit reporting agencies, such as  Experian or Equifax.

Warning:

Do not use services that offer to establish business credit by falsifying accounts with the credit reporting agencies. This is an illegal practice and can cause you to lose any credit standing with the credit reporting agencies.

If you any questions feel free to contact us: At @redspectrumbiz on Instagram

Vendors That Will Help You Build Business Credit

Business credit scores have a major impact on companies. Aside from having an effect in gaining new business and partnerships, they play a big role when you’re applying for business financing, as lenders look at a company’s business credit file when making their decisions. A report that shows a positive payment history with several vendors is proof that the applicant is financially responsible and is therefore creditworthy, increasing its chance of being approved for financing. A poor score, meanwhile, is a red flag.  

Not sure how to get business credit for your company? Read on.      Appearances Matter.  

The first step is to make sure your business is established properly and legitimate.  Then open you a business account at your local bank That’s how you establish your business credit scores.  It will be seen by the top business credit rating companies. That will report your business credit through Equifax.  For more information go to www.theredspectrum.com     

When you have everything in place, you can start building your business credit.  An easy way to build your business credit is through a vendor credit line.  

What is vendor credit and Why Does Matter?

Vendor credit is when vendors allow you to “buy now, pay later.”  Vendor credit can also help you build your business credit scores.  And also help you get additional funding in the future.  These are Net 30 accounts, which means that you have 30 days from the date of purchase to pay the full amount.  Make sure you make your payments on time or before the due date.

What You Need to Know About Vendor Reporting

That all vendors don’t report your business payment information to your business credit bureaus.  It is better to choose vendors that report to the three top bureaus, Dun & Bradstreet, Experian, and Equifax.

There are vendors that report to business credit bureaus on different frequencies.  Some reports monthly, quarterly, or yearly.  These frequency reports affect the length of time needed to build your business credit files.

If you want to build your business credit in 30 days, go for vendors that report monthly.

Be aware that many vendors report the balance owed as your high credit limit, instead of the actual credit limit you’ve been approved for.  For example, even if your business has been approved for a $1,000 credit line and your purchase products were worth $100, your file will show $100 dollars as your high credit, instead of $1,000 dollars.  This difference can affect the credit limit recommendation that the business credit bureaus will provide in your file.  Below are 5 vendors that will help you get started.

TheRedSpectrum.com

Reports to Equifax and Credit Safe.  A super simple way to get started building business credit.  They give new businesses a chance.  Trade-lines starting at $1500 up to $10,000.  They have great ebooks, audiobooks and video tutorials that will help you learn more about how to manage your business.  They also offer a FREE Credit Consultation.  Just sent a message on the website.  A must for starting Business Credit with monthly reporting and NO Personal Credit Check.

Grainger Industrial Supply

Grainger reports to Dun & Bradstreet and sells a wide range of items, that includes: Hardware tools, Plumbing supplies, Janitorial products, and Safety equipment, or other items you need for your office.  To qualify, you will need a business license, EIN, and a Duns number.  

Uline

Uline also offers a wide range of products that most businesses need, such as Office Supplies, Furniture, Shipping Boxes, and Foodservice supplies.  Uline reports to Dun & Bradstreet and Experian. Shop for items you need then use the Net-30 option when checking out.  A successful checkout means you been approved.  If you have a limited credit history, you may have to prepay for your first few orders to be approved for Net-30 payment terms.

Quill

Quill sells office, cleaning, and packaging supplies and also reports to Equifax.  You will need to fill out a profile when opening an account. You will be asked what industry the business belongs to and what year the company was established, but don’t worry, because even new businesses can get approved. Similar to the first two vendors, Quill also offers a huge inventory of merchandise. Just add your chosen items to your cart then choose “order now and pay later” upon checkout. Quill takes 1-2 hours to review your application for net-30 terms if you shop during business hours, or up to 1 business day if you shop outside business hours. If you have limited or no credit history, you will be asked to pre-pay for your orders for 90 days. Quill will then review your account and set up net-30 terms.

Important Notes

It’s important to understand that when you start building business credit your credit history will be very young, and it is crucial that you pay all the accounts at or before the payment deadline. Once you have several vendor accounts reporting to the big business credit bureaus, you can now start getting credit from other providers such as Office Depot, Conoco, BP, Visa, and MasterCard.

Once you have started to build your credit score, it will be much easier for you to obtain a business line of credit and other types of loans such as SBA loan or short term loans for buying equipment, hiring staff, increasing inventory, paying invoices, and more.  If you have any questions feel free to contact us:                  At @redspectrumbiz

How to Start Building Business Tradelines on your Equifax Business Credit Report

In order to build business credit, trade-lines are essential. Establishing credit with companies that report to Equifax business credit will help you start trade lines through Equifax for business. Tradelines can help you build your small business credit so that your company can qualify for loans and bigger lines of credit in the future. Equifax is one of the three main credit bureaus along with Experian and Dun and Bradstreet.                

A tradeline named Red Spectrum will start building your Equifax Business Credit profile. You can check out www.theredspectrum.com.  You can get anywhere from $1500 to $10,000 or more showing up as a positive tradeline fast.

 Once you have these lines in place, and you make your payments on time, your small business credit will begin to grow.

 Apply for a Federal Tax Identification Number

Apply for a Federal Tax Identification Number, or EIN, if you don’t already have one.   Do this directly through the IRS service website. You will need to supply your business contact information and some basic information about what type of business you are running.  Even if you have a sole proprietorship, it is important to have an EIN to keep your business credit separate from your personal credit. 

Open Office Supply Accounts

Open trade lines with office supply companies.  These are the easiest accounts for a new small business to open. These companies report to Equifax Business credit and through www.theredspectrum.com it becomes super simple.  Also to other credit bureaus.  It's very important to note that Equifax doesn't establish the tradelines but reports them.

These trade line accounts operate on net-30 terms. This means that you have 30 days to pay the balance on your account.  Make sure you pay on time or before the due date.

Apply for a Small Business Credit Card

Apply for a small business credit card. After you have established your initial tradeline with Equifax to your credit history. Through www.theredspectrum.com,  keep your payments current, within six months to a year, you should be able to qualify for a small business credit card.  You will want to keep balances low and pay the card on time every month. Your credit card company will report to Equifax and further help establish your business credit history.

Monitor Your Business Credit 

Monitor your business credit.  You can request a copy of your tradeline credit history with Equifax with a purchase through www.theredspectrum.com.  These companies also offer monitoring services that will help you keep an eye on your credit score and what is going with your accounts.  Make sure that all of the information on these reports are accurate.

Continue Building Your Business Credit

Continue building your business credit. Apply for larger balance small business credit cards and keep your payment histories current. Within two to three years of managing your business credit wisely, your tradeline through Equifax should be stellar and you will be able to qualify for larger loans and other corporate credit cards.

If you have any questions feel free to contact us:

 At  @redspectrumbiz 

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How To Build Business Credit for a Small Business

Establishing business credit is an important step for any new small business and helps you to (1) Maintain a good business credit history that separates from your personal credit history and experience the business benefits of having a good business credit, and (2) Differentiate expenses between owners and the business.

Why separate business credit histories? 

By having business credit you can separate your business expenses from your personal expenses.  For example: if you have some financial missteps that impact your personal credit history and score, they shouldn’t impact your small business credit.  If you have established a clear separation and vice versa.

Why separate businesses and owners?

Unless you’re operating your small business as a sole proprietorship or general partnership, you need to demonstrate that the business is separate from the owners. One of the key benefits that corporations and limited liability companies (LLCs) provide the owners is the protection of their personal assets. Keep this protection in place by consistently showing a clear separation between the owners and the business.                                                   

                Eight steps to establishing your business credit:

                  Benefits of having good business credit.

Having good business credit can provide a number of benefits, including:

Once you have established and built good business credit, be sure to monitor and protect it, just as you do with your personal credit.

If you have any questions please contact us:                                                         At @redspectrumbiz​ on Instagram  

How to Establish a Good Business Credit Score

If you’re looking to get your business off the ground and keep it there, a good business credit score is a must.

Similar to a personal credit score, though vastly different in some aspects, a business credit score is essential to protecting your company’s financial assets.

From trade capital to financing approval, a solid score is required for a myriad of business transactions and tells others that you’re financially healthy and trustworthy.

Building your credit score can seem daunting at first. Yet, the good news is that if you’re just getting started, you’re in a great position to put into practice some key steps now, so that in the future, your numbers will be where you want them.

Interested in learning more? Let’s take a look at 10 steps to start today:

1. Understand The Basics

The first step is establishing a good business credit score is understanding what it is!

Let’s keep it plain and simple, a business credit score measures your creditworthiness, or how likely you are to make good on your credit purchases.  Lenders can use this to determine your ability to pay back a business loan or make payments on a corporate credit card.  Make sure you pay on time. 

The three main business credit bureaus, Experian, Equifax, and Dun & Bradstreet, will each have their own criteria when measuring your business credit score.

For the most part, though, they’ll be looking at some degree of the following:

 At this point, you may be thinking, but I’m a new business! I haven’t had the chance to create a company credit card, much less establish a payment history You’re not behind! That just means you’re in a perfect place to begin.   Which brings us to our next step. 

2.  Separate Your Finances

  If your business is incorporated, it will have its own financial sector, totally separate from your personal accounts. Yet, even if you’re a sole proprietorship or a small business owner, you’ll still want to keep your personal transactions apart from your business-oriented ones. Opening up a business bank account and applying for a business credit card are great first steps. This will be essential to ensuring your business credit is clean and accurate and can keep your personal financial activity from influencing your score. It will also protect your personal credit from being risked during any business-related lending.

3.  Know What Is On Your Business Reports. 

Equifax credit is really a good way to get started knowing what is on the Equifax report, DnB report, Experian. 

4. Obtain A DUNS Number

As one of the top three business credit bureaus, Dun & Bradstreet can play a major role in your business credit score.

Recognized worldwide, you can use a Dun & Bradstreet number to bid on government contracts for your company.

Once you’re granted the nine-digit number (not to be confused with your Canadian Business Number), Dun & Bradstreet will use this number to create your business credit profile.

It will track your lending and vendor relationships to monitor your financial stability and establish a snapshot of your creditworthiness.

5. Establish Business Credit Accounts

If you’ve already opened a business bank account and credit card, great! Those are good first steps. Next, consider opening a few more lines of credit in your company’s name.

Using these accounts wisely will help establish your company as a trustworthy borrower. Your on-time payments can provide a track record of your financial stability that credit bureaus can follow. Recommended accounts to open include:

https://www.instagram.com/redspectrumbiz/?hl=en

This step doesn’t just apply to large corporations. Research shows that less than one-third of small business owners have business accounts tied to lines of credit, which should change. It’s a relatively easy step that can make a huge difference in the long run.

6. Choose Vocal Vendors

Think about it: You want to make sure that people know about your awesome payment history, right?

There’s no way to do that if you continually do business with vendors that won’t report your activity to business credit bureaus.

If you’re just starting out, make sure you select vendors with a solid reporting strategy. Getting the word out there is necessary to allow lenders to see that you’re reliable.

Here are some vendors that will report your business credit to the business agencies:

1.  www.theredspectrum .com                                                                                    https://www.instagram.com/redspectrumbiz/?hl=en

2.  www.quil.com

3.  www.uline.com                                       

7. Pay On Time, Every Time (Or Earlier)

It goes without saying, but we’ll say it here anyway: If you want a strong business credit score, you’ve got to pay your bills and invoices in a timely manner.  So make sure you pay on time or early before the due date.

One example? The Duns & Bradstreet PAYDEX Score. Though this scoring system goes up to 100, simply paying your bills by the deadline won’t get you the highest marks. In fact, you’ll only get to 80 that way. To earn a total 100, you’ve got to consistently pay early.

Set reminders on your phone, mark due dates on your calendar, do whatever it takes to make sure those deadlines don’t slip past you.

8. Keep Your Information Accurate

Though there are three main credit bureaus, Duns & Bradstreet, Equifax, Experian.   That said, it’s important to routinely check your company’s profile across all three to ensure against any errors and to make any necessary updates. Research shows that 25% of small business owners who checked their business credit report found an error that made them seem riskier than they really were. Making sure all your information is accurate can also help you identify fraud. Double-checking your reports is not only good business sense. It could make the difference between whether a lender will work with you or not — and is worth every minute. In addition, any time your business information changes, for instance, if you get a new address or your legal business name changes, be sure to update your profile information. This way, when lenders search for you, they’ll be accessing the latest and most accurate data available.

9. Keep Your Personal Credit Score Healthy

While it’s true that your business credit score is separate and different from your business one, lenders will often consider your personal credit score when you apply for financing.

You may even be required to sign an agreement that you’ll personally cover any debts owed if your business cannot pay its part on time. To this end, keeping up with your personal credit, and making all your required personal payments on time, is crucial.

10. Utilize Your Credit

Credit utilization is a factor in your business credit score, so don’t just open those lines of credit and leave them sitting there at full capacity for a long period of time.

Start early, and utilize your credit lines, but be careful not to max out your credit limit. A good rule of thumb is to aim for between 20 and 30% utilization. Keeping your usage steady will help build your record of dependability and creditworthiness.

Go to www.theredspectrum.com and sign up for a free consultation.

If you have any questions please feel free to contact us: At @redspectrum​biz on Instagram.

7 steps To Establishing And Building Business Credit.

The process of establishing and building business credit for a startup or an existing business can seem like a daunting task.  However, you must undertake the task because a strong business credit profile and a good score will have a significant impact on your current and future business plans, as well as your reliability as a borrower in your vendors and lenders eyes.

Since you are reading this article,  then you must already have an understanding of how your credit profile affects your business.  Also, if you have ever sought a consumer loan, such as a car loan or a home loan for personal use, you would know how credit scores play a role in determining whether you qualify for consumer financial products and the interest rates you will have to pay on them.

It is common for new business owners to be confused about how to build business credit for their startup.  Here are some tried and tested expert-approved way to get you started:

What Is Business Credit And Why Should You Care?           

Before we begin, it would be best if you establish a better understanding of what business credit is.

  Similar to your personal credit score, a business credit score helps lenders gauge your reliability and trustworthiness as a borrower because it serves as proof of your excellent track record with vendors and lenders.  If your lenders can trust you to pay back on time and in full, then that will improve your chances of not only securing reliable vendors and secure better trade terms but also secure business financial products and better interest rates.  A higher business credit score can help you avoid the instances where vendors ask you to prepay for products or services.

The leading business credit reporting agencies in the US are Experian, Dun & Bradstreet, and Equifax.  These agencies collect data from different sources, including vendors, creditors, and other public information outlets to calculate a business credit score.  unlike the personal credit score range, this is between 300 to 850, the business credit score ranges from 1 to 100.  A higher business credit score indicates that your business is a more trustworthy borrower.

Establishing Business Credit will help you separate your personal credit from that of your business.

How to Business Credit, Tradeline, build business credit with just your EIN.  How to get money for your business. 

Now that you have a better understanding of what business credit  is and  how building a strong business profile can benefit your business, we can proceed to the seven steps you can take to establish and build business credit and how to get money for your business without damaging your credit score:

1. Set Up Your Business Entity: 

Merely opening your business to customers does not mean that you have created your business entity.  Setting up a business entity involves incorporating the company, acquiring a business phone number, establishing an official bank account for your business and getting your business listed in business directories such as Yelp, Better Business Bureau, Angie’s List, etc.

Incorporating your business, having a business account as well as getting a dedicated phone number, and address for your business will play an essential role in separating your personal and business finances.  Consult a lawyer or an accountant when deciding the structure of your business.  

  2.  Get your Employer Identification Number (EIN)

The Federal Employer Identification Number (EIN) role is essentially the same as your Social Security Number.  Its purpose is to help the IRS track your business’s tax.  Although you might not need an EIN for your business, especially if it’s a sole proprietorship, single-owner LLC or a partnership, it might be a good idea to obtain an EIN for your business because it is required to incorporate your business, and for solidifying your business position as a separate entity.   It is also important to note that it is possible to build business credit with just your EIN.

3.  Open Credit Files Business Credit Reporting Agencies

It is likely that business credit reporting agencies like Experian and Equifax have already created your business files because they extract data on business from public record files such as business filings, court documents, collection data, etc.   On the other hand, the leading and most used a business credit-reporting agency Dun & Bradstreet requires businesses to apply to open a credit file.

4.  Establishing Relationship With Vendors and Suppliers

Your business credit profile will heavily be influenced by your tradeline of credit with vendors and suppliers.  You can improve your business credit by having a stable relationship with vendors and suppliers that report your payments to the credit reporting agencies.  Fulfilling your payments on time and paying your bills on time will help you maintain a good credit score

5.  Get A Business Credit card

Having a business credit card from a company that reports to agencies and paying the credit card bills on time will help you establish business credit.  A business credit card will also help you cover day-to-day business expenses, which newly established startups tend to struggle with.

6.  Keep An Eye On Errors 

Errors in business credit files are not uncommon and can influence your credit score.  therefore, it is crucial to monitor your business credit files with each agency and report any errors immediately.

7.  Be Responsible

Building solid business credit takes time and effort.  It is essential to be responsible for your business borrowing and avoid borrowing too much in a short period because it will harm your credit score.

Follow the rules as you would for managing your personal credit score.  Keep an eye on different factors that influence your score.  the combination of your credit accounts, how you use the credit and the time business credit history are all essential factors.  

Still, Need Help?

We at the Red Spectrum understand the difficulties that small businesses and new businesses face when establishing their business credit profile.  We have a ton of tried and tested strategies, and the comprehensive knowledge to help you develop your credit business credit in the best way and fastest time possible.

We firmly believe in ‘When We Report, You Grow.’

contact us for professional business credit development assistance.

At @redspetrumbiz on Instagram

How to Build & Get Business Credit

Figuring out how to access business financing and credit is a common quest for both new and existing small business owners. From start-up costs to new expansion strategies, establishing a strong business credit profile with diverse accounts can help make or break your immediate and future business plans.

Why Should I Learn How to Establish Business Credit?

If you’re reading this, you already know that good credit (both personal and business) is important for the future of your venture, but let’s explore the benefits a bit more.   Strong business credit scores can help business owners secure better interest rates on loans, decrease instances where you need to prepay for specific products or service and secure better trade terms with important suppliers in your industry.  In the long run, this will help you save money and access the funds or assets you need to help your business grow.

In fact, one of the primary reasons business owners is denied funding is due to a failure to understand their credit. 

8 Steps to Establishing Business Credit

At this point, you’re probably thinking “Yes, I get it. It’s important. Can you please tell me how I can get this party started?” Much like a great party takes some planning and coordination, establishing and building credit takes time and effort. However, these tips on how to establish business credit can help you bring your plans and aspirations to fruition.

 1.  Put Your Business on the Map.

2. Establish and Maintain Good Credit Relationships with Suppliers and Vendors.

In the world of business, a solid line of credit with industry-relevant vendors or suppliers is like gold. The better your relationship, the more likely you are to avoid paying upfront for items or services. If you can secure a line of credit or payment terms such as net-30 with just a few (3-5) vendors or suppliers that report those payments to business credit bureaus agencies, you can establish a positive business credit history. 

Here are three vendors that report payments to business credit bureaus, and that are flexible when extending credit.

 3.  Obtain an Employer Identification Number.

A Federal Tax Identification Number, or EIN, is like a Social Security Number for your business. You’ll need one of these to incorporate, and you may need one to open a bank account under your business’s name or secure business contracts.

4.  Pay On Time All the Time.

This is probably the number one rule in any credit situation. Paying your bills on time shows that you are reliable and can effectively manage (and pay off) your debt. Late payments, especially severely delinquent ones, will bring down your credit score and negatively impact your business credit profile.

5.   Open a Business Credit Card.

Opening a business credit card with a company that reports to the major credit reporting agencies is a great way to establish business credit. You definitely should have at least one open credit card, but more than one can also help. However, be sure to use caution and avoid extending your business finances. Just because the credit is there, doesn’t mean you need to (or should) utilize all of it.  Find business credit cards that match your credit profile. 

6.   Get Incorporate.                                                                                                                                                                                                                               If you haven’t already, seriously consider getting incorporated. By adding Inc. or LLC to your business, you’ll be legally separating your business and personal profile. If you choose not to do this, your business and personal credit history (among other things) will be legally attached.                                                                                                                                                 

7.  Transition  Commercial Expenses Away from Personal Finance.

Given the steps above, this is fairly redundant, but none the less important. By opening credit cards, lines of credits, and bank accounts in your business’s legal name, you’ll be separating yourself. Add on your new Inc or LLC, and you’ll be creating plenty of distance. Clearly separating your expenses also makes it a lot easier to manage taxes!

8.  Monitor Your Credit

25% of small business owners have reported significant errors in their credit reports. Diligently monitoring your business credit history can help you spot any issues or blemishes that aren’t accurate. If you do find an error, be sure to file a dispute with the reporting agency. (Sign up for Nav get an alert when your business credit profile has been created with Dun & Bradstreet or Experian.)

How to Build Business Credit

Once you have established business credit, your next step is to build strong business credit. Many of the steps above will help you do just that, but it’s important to focus on two specific steps to help you boost your commercial credit history.

The first step is to pay early. In the advice above, we mentioned how it’s important to pay on time. But with some business credit scores, you can, in essence, get “extra credit” for paying your bills before they are due. Payment information on business credit reports is often more detailed than on personal credit reports. Pay faster if you can, and you may build your business credit scores more quickly.

The second piece of advice for building good business credit is to make sure you have accounts reporting to the various business credit agencies. Again, not all vendors and lenders report to all commercial credit agencies. For example, your business credit card issuer may report to SBFE but not to D&B; you won’t know until you check your reports.

So be sure to check your credit reports and scores with more than one major credit reporting agency to find out whether your accounts are helping your scores, and if not, consider adding additional credit references.

If you have any questions feel free to contact us: At @redspectrumbiz on Instagram

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3 Vendors That Will Help You Build Business Credit FAST

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One of the easiest ways to start off on the right foot when it comes to business credit is to get net-30 accounts with companies that report to commercial credit agencies.

What is a Net-30 Account?

A net-30 account is one that extends you 30 days to pay the bill in full after you have purchased products. It’s vendor credit that allows you to buy now and pay later. Vendors that report those payments to commercial credit agencies help your company establish business credit.

Many entrepreneurs think that means getting a loan or line of credit. That help, but not all business owners will qualify for a business loan or line of credit, as those often require strong business and/or personal credit scores, and may require proof of business income.

So what other accounts are out there? Here’s a simple way to get started if your business is young, or your business isn’t making a lot of money yet: vendor credit. Vendor credit is when you purchase goods or services from vendors that allow you to buy now and pay later. Vendor credit is not just limited to net-30 accounts either—some vendors offer net-15 (15 days to pay), net-60, or even net-90 day terms. Make sure your business established properly.

Before You Open Net-30 Accounts…

Before you jump in and open accounts, we recommend you take a few essential steps to make sure your business is viewed as legitimate. If your business is not set up as its own legal entity (such as an LLC or S Corporation, for example), consider creating one. If you decide to operate as a sole proprietor, make sure your business is at least registered with your state’s Secretary of State. You’ll also want to make sure your business has a D-U-N-S number, used to identify it in commercial credit reporting agency Dun & Bradstreet’s database. And use a business email address on your account.

Where do you find these vendors? Below, we’ve provided three net-30 vendors that will make it easy to get started.

 3 Net- 30 Vendors That Report to Business                                                                                                                                                                                  Make sure you pay on time or early and you’ll have another credit-building account under your belt.

      Tips for Success

There are a few important caveats in this process.

First, and this is important, you do not have to run up debt and pay interest to build business credit via net-30 vendors. Most vendors allow you to purchase items and pay them off in full by the due date to avoid interest. That’s perfectly acceptable when it comes to building business credit.

If you any questions feel free to contact us: At @redspectrumbiz on Instagram.

The Truth About Business Tradelines

If you’re trying to establish business credit, you’ve probably heard the term “tradelines.” You know they are important, but you’re not sure how to get them and how they can benefit your business.

What Is a Tradeline?

A tradeline is simply an industry-speak for “account.” They may include business credit cards, lines of credit, and loans.  You also get store cards. They also include information from vendors who report to 3 bureau credit reporting agencies. For example, you may have an account with a vendor with terms that give you 30 days after the invoice to pay your bill (net-30 day terms). If that vendor reports information to a credit bureau, it creates a tradeline.

Here’s a list:

Why Do You Need Trade-lines?

Because tradelines are important for building your credit.

They also include information from vendors who will report to three-bureau credit reporting agencies.  If that vendor reports information to a credit bureau, it creates a tradeline.

How To Find Tradelines That Reports?

Establishing good business credit is often a confusing process because not all lenders and vendors report to all major business credit reporting agencies. For example, information about your equipment lease may show up in the PayNet database, while information about business credit cards is often shared with lenders via the Small Business Financial Exchange (SBFE).

Tip: Need help finding accounts that report to business credit reporting agencies? Make sure your business is established properly.  Pay your accounts on time (early is even better) and you’ll be on your way to establishing a high business credit score.

  Seasoned Tradelines

You may have heard the term “seasoned tradelines.” It refers to accounts with an established credit history. Some companies offer to sell seasoned tradelines to help business owners establish credit quickly. Here’s how it works:

What’s Next?

Building strong business credit is a worthwhile goal. It can open up avenues to better financing for your business, help you separate personal and business credit, and can eventually help you avoid risky personal guarantees when you borrow. Establishing positive tradelines is a crucial step in that process. To do so, you will want to take the following steps: