19. Adding Vendor and Credit Tradelines

To get the most from your business credit, you need to have vendor lines on the net terms of 15, 30, 60, or 90 days.

Establishing Credit Lines from Vendors

Now your goal is to establish at least 5 credit lines ( 3 with Payment Terms: Net 30 and 2 with Payment Terms: Revolving ), but preferably 8 lines of credit ( 5 with Payment Terms: Net 30 and 3 with Payment Terms: Revolving) from vendors who report to the three agencies. (Preferably they will report to all three credit bureaus.) If you already have two trade lines reporting to the agencies, then you’ll only need 3 more to reach the minimum amount required for optimal credit building. However, you will eventually want to add several more for even better credit scores.

Throughout this phase of the BizCredit Builder, you will learn to obtain vendor lines of credit, which help you grow your scores and enhance your profiles with credit agencies. You’ll learn to acquire lines of credit for products and services that add to your score while delivering products and services you need to enhance your business. These vendor credit lines can also help with your cash-flow needs.

Fortunately for your business credit, there are over a half million vendors that provide credit to businesses. Unfortunately, not all of them actually report this information to the major agencies. You can still use vendors that don’t report, but you will not see them on your profiles unless you take certain measures, such as ask them to report on you see Step 22.

Throughout this section, you will have the options of accessing a researched database of vendors that report to the agencies. You’ll learn about the requirements for each vendor, as well as the approval process. Be sure, at least at first, to only apply if your business meets that vendor’s requirements.

Important Facts About Getting Vendor Accounts, Lines of Credit And Other Tradelines.

Having cash on hand will allow you to pursue more projects and grow your business. Asking new suppliers for longer payment terms can be a great way to keep cash around longer.  You can get the products and services you need to run business operations through vendor credit lines. You can defer the payments for 30 days, which is called a “net 30 account,” helping to manage cash flow.

Getting Approved For A Business Credit Cards – Business credit cards can make getting services and supplies for your business much easier than if you had to write a check or use cash. Keep in mind that applying for a business credit card will put an inquiry on your business credit profile and could even affect your personal credit profile. To help you qualify for the business credit.

• Payments must be paid on time on your personal accounts for the next 4 months
• Experian Business Credit Score of 70 or more is required
• Personal Credit Score of 650 or above is required

To Get Accepted Into A Large Retailer’s Supplier Network such as Walmart and Target can change your business.  You’ll need proof you can fulfill the order and they will often check your business credit, ask for trade references or past invoices from other vendors. In general, your company must be registered with Register your company with Dun & Bradstreet and have a Paydex score of 75 or higher.

You credit report with Dun & Bradstreet will be enhanced when your line of credit with the vendor is reported to the agency. For Experian and Equifax, your company credit file will be activated once the lines are reported. (Assuming the file is not already created.)

In many cases, vendors will allow net 30 day accounts for your business as long as it has an EIN and a 411 listing.

You should apply for vendor credit without using your social security number, even though some vendors ask for it and may even require it. Before you give it out, submit your credit application without it.

You may be required to offer an initial prepaid order before getting a line of credit from some vendors.

Your credit profile should have at least five tradelines from vendors that report to the agencies. Your goal is to get credit from vendors and suppliers that will grow your business while building your credit reports, creating a dual advantage.

Although you will have 30 days (for net 30 day accounts), pay your bills 5-10 days before the due date. This will help your business achieve a 90 or better score with Paydex®.

Leasing equipment doesn’t require as much cash as purchasing does. It can also be easier to lease than trying to get a loan to purchase your equipment. The task below will help you prepare for a lease application.

This step of the BizCredit Building process requires patience. You need to allow vendors time to report on all cycles of the credit system. This can take three cycles of the net accounts to build the score. For example for 30 day accounts, you’ll need 90 days. (3 cycles of 30 days = 90 days.)