Jump to content

Business Credit... Who show's the love and How do you do it?

Recommended Posts

I am starting a (very) small business, but I want to get the credit rolling on it now, so in say 5 - 10 years when I get serious into it it will have prime credit.

Who show's the love and doesn't ask for personal guarentee's for starter cards...

not really willing to pay any fee's, but I am willing to accept horrid interest rates and low limits... Gotta love starter cards :)

Already got the fed tax id, and the state ESN...

Link to comment
Share on other sites

Best way to build business credit is go get a Dunn & Bradstreet number (watch out...they'll try to sell you their credit watch service) and then open "store" accounts at Office Max, Home Depot...whatever. With the D&B (theoretically) store accounts won't require a personal gurantee. You can also try Quicken or Pitney Bowes for their rebranded cards.

Good Luck! and be careful...

Link to comment
Share on other sites

As Willing mentioned, the D&B # is the way to go for getting business credit. If you have companies your company has history with already, then you would probably want to fork over the money for the Credit Builder program that they have. Otherwise, you can get the # for free and start getting your phone co, etc.... to report.

Link to comment
Share on other sites

Getting the Duns number from Dun and Bradstreet is the best way to start. I would also suggest you getting a business telephone line in the business name as most vendors will use this to verify that you are a legitimate business. Also you are going to want to have a business bank account.

Once you get the duns number business bank accound and phone line apply for stapes, T-mobile, Dell and other small business frendly companys. You objective is to get a Pay dex score with Dun and Bradstreet. If you get your score above 80 you are in great shape. its like having a 700 plus personal credit score. If you need more info dont bother to ask. I have a lot of info about establishing business credit.:)

Link to comment
Share on other sites

Applied for the free # from D&B.

so the next step is to get a

Business Phone #... Can it be a cell # or does it have to be landline... honestly I wasn't wanting to get a landline phone cause who has one of those anymore...

I will get a business bank account.

I got the State tax id

I need to get a Fed tax id

I was thinking about getting a corporation in wyoming or something where its fairly easy and cheap. Any thoughts on this?

Do you have any web resources for me to look at?


Link to comment
Share on other sites

Cell phone would work just fine.

Incorporate in your home state. You might need a lawyer, but it shouldn't be very expensive. Get references locally, if you can. While you can do it yourself over the internet, it will look and feel more like a business if you go through the formalities. That's important not only to the outside world, but to you also...

Link to comment
Share on other sites

Looks like you are going to need an lan line for business credt. Thy creditor and vendors use this as a verification that you are a REAL BUSINESS The following info of from Business finance web site:


Once your Business Credit Assessment is complete, you can begin to build your Business Credit Profile. In order to successfully fund your future capital needs, it is important that you build a favorable credit profile for your business.

The action items that you must do to build an excellent Business Credit Score:

1. Have a Legal Business “Entity”

In order to create and build a "business credit file" that is separate from your personal credit file, you must have a business entity.

If you need help establishing your business entity go to http://www.mycorporation.com and review your online options.

Establishing your business as a separate legal entity is where you begin to build a business credit profile that is separate from your own personal credit profile.

2. Business Listing Confirmation

Your next step is to confirm that every agency and trade credit vendor has your business listed the exact same way, with the same address and phone number.

For example, one might have you listed as "ABC, Inc.", while another has you as "AB Consultants", and yet another as "AB Consultants, Inc.".

Take the time to verify that all your accounts (State, IRS, Bank, 411 Directory, power bill, phone bill, landlord, etc.) have your business listed the same way and with your "exact legal name".

3. Physical Location

Your business must be real and not just and an attempt to build personal credit by using a business entity. If that is what you are doing STOP HERE! This process will not work for you. Your business must have a physical office space, even if it is at your home. It is at this physical location that your business should receive regular mail, not at a mailbox store or post office box.

4. Phone Service and Directory Assistance

Your business needs a separate phone line and fax line. The business phone number must be listed with directory assistance. Call 411 and make sure anyone can find your business under the exact business name. If your business is not listed in 411 directory assistance than dial 0 for your service operator and make sure that they get your business listed correctly with 411.

5. Email and Web Address

6. Licenses

You must obtain a business license and, if applicable, a tax resale license in the State and possibly County or City where you are conducting business. Following the proper regulator guidelines for operating your business is critical to building a favorable business credit profile.

7. Financials

The business should have two years of financial statements. Don’t panic or stop here if you haven’t been in business for two years. Begin building your financial statements from the day you started the business and keep going with this process.

How do you have two years of financials with a business entity that was just set up? If you have been in business as a sole proprietor or partnership prior to forming your business entity, you can use those financials. Ideally, the financials include a balance sheet and income statement for each of the last two years. For credibility I highly recommend that you use a CPA to prepare your financial statements.

8. Tax Returns

9. Bank References

Your business entity must have a minimum of one bank reference. It would be great if your business bank account was at least two years old, but more importantly to place your business in a good lending position it should have an average daily balance of at least $7,000 for the last three months.

Your business banking reflects how you manage your cash flow. Funding sources want to know that your cash flow is capable of handling the business debt and expenses on a consistent basis. Accounts that show NSF returned checks can be deal breakers!

If a funding request amount requires a $2,000 a month payment, funding sources will want to see at least a "Low 5" bank rating. Your "Bank Rating" is based on your average daily minimum balance over the last 3 months.

Here is how “Bank Rating” works. It is based on your average daily balance over the past three (3) months, so your rating would be:

Low 4 for $1,000 - $3,999

Mid 4 for $4,000 - $6,999

High 4 for $7,000 - $9,999

Low 5 for $10,000 - $39,999

Mid 5 for $40,000 - $69,999

High 5 for $70,000 - $99,999

Low 6 for $100,000 - $399,999… etc., I hope you see the pattern here.

Having the $7,000 balance gets you rated at a “High 4”. Not having it will not stop the process of building a favorable business credit profile, but it will slow it down. If you don’t have the $7,000, borrow it from family or friends and don’t use it, just let it act as your base line in the business account so that your balance never drops below that amount. Even better if it is $10,000, because your rating would be a “Low 5” and that really changes things.

Make sure that your business bank account is reported exactly as your legal business entity name and at the same physical address as your business, not a Mail or P.O. Box.

10. Credit Reporting Agencies

Dun & Bradstreet (D&B) is the leading “business credit” reporting agency in the United States, Experian is the other. D&B provides businesses with a separate credit file number that is used to track and rate your business credit profile. This is called a “D&B number” or “DUNS number”.

Obtaining a Dun and Bradstreet number (D-U-N-S #) begins the process of building your business credit history (profile). Getting your "number" is FREE. All we are doing here is getting your D-U-N-S "number". This number is how lenders access your business credit profile and it is used to determine the creditworthiness of your business as a stand alone entity.

Your D&B number is asked for when applying with some credit card and leasing companies. Most banks and lending companies will ask for your D&B number. Once your corporation is setup and has been issued a Federal ID tax number, you can apply for your D&B number online at http://www.dnb.com.

The process of obtaining a D&B number is free and takes about two weeks to receive your number. D&B also has the Express Service for $499, where they will post your most recent financials and will call your trade references for an initial report. There is no need to pay the $499 that D&B wants to set up your "business credit file". The first time a vendor or lender asks for the file, D&B will set up your business credit file for FREE.

Potential creditors that ask for your D&B number will send a request to D&B asking for a credit profile on the corporation. If a profile is not already available, D&B will compile one from information D&B will request from your corporation. Then D&B will ask you for financial statements, tax returns, and the trade and bank references listed above.

Experian reports are developed only from information that is provided by your trade references and retail accounts.

Equifax reports are developed only from information that is provided by you business credit card and retail accounts.

11. Trade References


You know have all the steps to build an excellent business credit profile, FREE of charge. But you must do the steps! Our goal is to relieve you of having to personally guarantee every level of your business funding. To do that you must reach a PayDex Score of at least 75.

PayDex is a "1 to 100" score calculated by using up to 875 payment "experiences" from your trade references reporting how your company pays its bills. Below is the PayDex Score Key, with a score of 75 or above being your goal.

100 Early to 30 days

90 Early to 10 days

80 Paid As agreed

75 Slow to 8 days

70 Slow to 15 days

60 Slow to 22 days

50 Slow to 30 days

40 Slow to 60 days

30 Slow to 90 days

20 Slow to 120 days

In order to reach your goal you will need to have at least five (5) trade references "reporting" to D&B that you pay no more than one week slow or better. Trade references are vendors who extend credit to your business. An example is the print shop that gives you "Net 30" day payment terms. Net 30 means that you have been allowed 30 days from the date of delivery in order to make your payment.

Your business entity is going to need five (5) trade references that have given you a credit account and report a favorable credit history to the credit reporting agencies. This can be one of the most difficult steps in the credit building process. Don’t worry and don’t stop here!

Trade references are just vendors. Check with all of your suppliers and ask them to give you Net 30 day payment terms and report your payment history to Dun and Bradstreet.

Establishing just five (5) favorable trade references is a major part of building your Business Credit Profile and creating a favorable PayDex score. This is not an overnight process and should be given a large amount of attention in order to succeed.

Getting your existing vendors enrolled and to actually report your business payment history the credit agencies can be a very time consuming and sometimes a fruitless process. You must have at least five (5) reporting

Link to comment
Share on other sites

This topic is now closed to further replies.

  • Create New...

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.. For more information, please see our Privacy Policy and Terms of Use.