How Does Business Credit Work?

Most business owners know that business credit is a thing, but they do not understand how it works. Many have the idea that all they have to do is apply for credit with their business name to begin building it, but that’s not quite right. Others have no idea it even exists. You cannot successfully build business credit if you do not understand how it works. So, how does business credit work?

Everything You Need to Know About How Does Business Credit Work from the Ground Up

The first thing you need to know about how does business credit work is that it does not build passively like consumer credit. You have to actively work to build it. This starts with how your business is set up. It needs to be set up to be a fundable entity separate from you personally. This is for many reasons, but for business credit it keeps your business and personal credit from getting all mixed up.

How to Build a Fundable Foundation for Business Credit

We like to call this a “fundable foundation” or a “foundation of fundability.” Basically, it is setting up your business in a way that makes it appear legitimate and credible. Some of the factors that go into this are common sense, others may surprise you.

How Does Business Credit Work? Contact Information

The first step in setting up a foundation for business credit is to get your business its own phone number, fax number, and address. Surprisingly, this doesn’t mean you have to get a separate phone line, or even a separate location. You can run your business from your home or on your computer, and you do not even have to have a fax machine. Find out more about how this works here and here.

How Does Business Credit Work? EIN

Your business needs and EIN. This is an identifying number for your business that works the same way your SSN works for you personally. It looks more credible to use this number rather instead of your SSN for business loan applications. Having an EIN is also important for building business credit, as it separates your business accounts from your personal accounts. You can get one for free from the IRS.

How Does Business Credit Work? Incorporating

Incorporating your business as an LLC, S-corp, or corporation is necessary for building business credit. It offers some liability protections, but it also separates your business from your self for definitively, which is essential to the business credit building process.

Which option you choose has more to do with your budget and how much liability protection you need than it does for business credit and fundability. The best thing to do is discuss the issue with your attorney or a tax professional.

Incorporation has to happen as soon as possible. Time in business counts, and it starts over at incorporation. This is true regardless of how long your business has been in operation before incorporation. Not only that, but any positive credit history you have related to your business up until the point of incorporation will be lost as well.

How Does Business Credit Work? You Need a Business Bank Account

You have to open an official business bank account. There are a few reasons for this. First, it even further establishes your business as a separate entity. Next, it will help you keep personal and business finances separate. This is beneficial for tax purposes.

In addition, there are several types of funding that will not be available to you without a business bank account. Some lenders and credit cards want to see one. Also, it’s not possible to get a merchant account without a business bank account. That means, you will not be able to take credit card payments. Consumers tend to spend more when they can pay by credit card.

How Does Business Credit Work? Having the Proper Licenses Matters

A business has to have all of the necessary licenses it needs to be fundable. If it doesn’t, red flags are going to fly up all over the place. Do the research you need to do to ensure you have all of the licenses necessary.

How Does Business Credit Work? A Professional Website is Important

You would probably never dream that your business website could affect your ability to get business credit. However, in today’s world, we all run to the internet first for virtually everything. Often, the website is the first impression your business makes on customers and even lenders. A poorly put together website does not make a good impression.

Spend the time and money necessary to ensure your website is professionally designed and works well. Do not use a free hosting service. Rather, pay for hosting. Along these same lines, your business needs a dedicated business email address. Make sure it has the same URL as your Website. Free email services such as Yahoo and Gmail are not sufficient.

How Does Business Credit Work? D-U-N-S Number

If you do not have a D-U-N-S number, you will not have a credit file with Dun & Bradstreet. Since they are the largest and most commonly used business credit reporting agency, that would seriously affect your business credit potential.

It’s free and easy to get a D-U-N-S number. You just go here. However, be aware that they will try to sell you a number of other products that you do not need. Just put your blinders on and keep pressing toward the goal of getting that number, which again, is free.

How Does Business Credit Work? Next Steps

After you have your business set up as a fundable entity, you will have to get accounts reporting to the business credit reporting agencies (CRAs.) It’s not as easy as just applying for credit and making payments. Here’s why. You have to have business credit to get business credit. Until you have and established score, most lenders will not approve you for funds.

How do you get around this? The first thing you can do is talk to those vendors you already have a relationship with. With an established relationship, they may be more likely to extend credit without a credit check. Be sure to ask them if they will report however, because if they will not it doesn’t matter.

You can also ask utilities and other monthly payments to report. Electric companies, phone companies, and even internet providers might report your payments if you ask. They don’t have to, but it can’t hurt to try.

In addition, there’s a little secret known as the vendor credit tier. These are starter vendors that will award net terms on invoices without a credit check, and then they will report your payments to the CRAs. This will get the ball rolling.

How do I Find Starter Vendors?

Vendors that fall into the vendor credit tier do not necessarily advertise themselves as such. As a result, they can be hard to find on their own. Here are a few options to get you started.

Grainger Industrial Supply

Grainger sells power tools, pumps, and hardware among other things. You can apply by fax or phone. If you need less than $1,000 in credit, you only have to have a business license for approval. For over $1,000, you will need trade and bank references.

If you are just starting out and do not have references, the $1,000 is plenty to get you started building business credit. Go here to get started.

Quill Office Supplies

Quill is popular and easy to get started with. They sell office supplies as well as cleaning and packaging supplies. Generally, you can get most of what you would use in the everyday running of a business from them.

They report to D&B. If you do not already have a D&B score, you will have to place an initial order first. Typically, they establish a 90-day prepay schedule. Then, if you order each month for three months, they will approve you for a Net 30 account.

Get started with Quill here.

Uline Shipping Supplies

Uline reports to Dun & Bradstreet. They carry shipping boxes, dollies, janitorial supplies, and more. Since they report to D&B, you have to have a DUNS number before you get started with them. They will also ask you for a bank reference and two other references. In the beginning, you may need to prepay before they will approve Net 30 terms.

Find out more about Uline here.

Behalf.com

Behalf is way of getting paid through an app, but they funding as well. The more often you have customers pay through Behalf, the more likely they are to offer you favorable funding terms.

They offer both purchase financing and virtual MasterCard options. Terms run from Net 30 to 180 days, and they report to Dun & Bradstreet, Experian, and Equifax. This fact alone, that they report to all the major credit reporting agencies, makes them extremely valuable when building business credit.

Find out more here.

How Does Business Credit Work? The Other Credit Tiers

The vendor credit tier is like a gateway tier to the other credit tiers. It goes a little something like this.

Retail Credit Tier

Once there are 5 to 8 or more vendor trade accounts reporting to at least one of the CRAs, then move to the retail credit tier. For example, Lowes falls into this tier and reports to D&B, Equifax and Business Experian. They need to see a PAYDEX score of 78 or higher. The PAYDEX score comes from D&B, so you need a D-U-N-S number for anyone that uses PAYDEX. Most do.

Fleet Credit Tier

Once you have enough retail accounts reporting, move to the fleet credit tier. This is credit that you can only use to buy fuel, and to fix or maintain vehicles. One example is Shell, who reports to D&B and Business Experian. They want to see a PAYDEX Score of 78 or better and a 411-business phone listing.

In addition, Shell might say they want a certain amount of time in business or profits. But if you already have sufficient vendor accounts, that may not be necessary.

Cash Credit Tier

Here is a good example of how business credit works. If you handle your credit responsibly in the other tiers, you can start to apply for cards in the cash credit tier.

These are service providers such as Walmart and Dell, and also Home Depot, BP, and Racetrac. They are usually MasterCard credit cards. If you have 14 trade accounts reporting, then these are in reach.

How Does Business Credit Work? The Application Process

Having your business set up properly is only the first step. Once you start applying for business credit you have to use your business information. Use your business address, business phone, and EIN. Do not use your SSN as part of the credit application, but be aware that they may ask for it, along with your birthday, for identification purposes due to fraud concerns.

By using your business information and not your personal information, you ensure your business credit transactions are not mixed up with consumer credit transactions.

Business Credit is Just One Part of Fundability

Fundability is composed of many layers, and business credit is just one part with layers all its own. It is a large part of fundability, but there is a lot more out there. One thing is for sure, you have to have the same foundation for both business credit and fundability, so it’s best to take care of that part as soon as possible. To find out more about fundability and what affects it, go here.

Why Is Business Credit Important to Fundability?

When you look at fundability, personal credit affects it as well. Knowing that, it’s natural to question why business credit matters at all. Why do we need two different kinds of credit? There are few reasons, but two of them are glaring once you understand how it all works. First, it costs a lot to run a business, and personal credit limits are not as high as business credit. If you try to put business expenses all on personal credit, you are going to hover near your limits, which will have a negative effect on your personal credit score. That could keep you from being able to get a loan for a house or a car due to simply running your business.

Also, if you have a good business credit score, you will likely have higher credit limits available to you. This will help ensure you have access to the funds you need to run and grow your business.

How Does Business Credit Work? It Is a Process

When trying to answer the question of how does business credit work, you have to remember that it’s not a short answer. There is a process that has to be followed. It starts at ground level with the foundation. Then you have to travel up several credit tiers, using your credit responsibly and making payments on time as you go. This will ensure you build a strong business credit score that will only increase your fundability.

The post How Does Business Credit Work? appeared first on Credit Suite.

Instantaneous Approval Bad Credit Cards – 3 Ways To Improve Credit Rating

If so, you can obtain authorized for a credit report card. Having poor credit scores might make is difficult to get very reduced prices when funding goods, you have the power to alter your debt circumstance. If you are having a challenging time developing credit rating, poor credit rating debt cards can place you on the appropriate course.

What misbehave Credit Cards?

Negative credit rating debt cards are made for individuals that are incapable to certify for a normal credit scores card. There are numerous factors why an individual is refuted for a credit scores card. If you have no credit scores background, as well as you are wishing to develop debt, several credit scores card business position you in the exact same classification as an individual with poor credit rating.

There are 2 kinds of negative credit score debt cards. Guaranteed credit report cards ask candidates to send an application with a down settlement.

Usage Bad Credit Cards to Your Advantage

Utilize the credit score card sensibly if getting a negative credit score debt card to increase your credit score score. Keeping great credit report is not difficult. You have to be disciplined as well as make clever credit rating choices.

For beginners, keep reduced equilibriums. Credit report cards are not cost-free cash. If feasible, pay off the equilibrium each month.

In addition, send credit report card settlements on time. If you do not keep a great settlement background, the debt card firm might reduce your debt restriction.

When you have actually developed an excellent background with your present credit report card business, you will certainly certify for much better credit rating card provides in the future. Using for numerous lines of credit report will certainly reduce your credit history rating.

If you are having a hard time developing credit history, poor debt cards can place you on the appropriate course.

Negative credit report debt cards are created for individuals that are not able to certify for a routine debt card. If you have no credit rating background, as well as you are wishing to develop credit scores, several credit scores card business position you in the very same classification as an individual with negative credit rating. If getting a negative credit score debt card to increase your credit score score, utilize the credit history card sensibly. When you have actually developed an excellent background with your present credit report card business, you will certainly certify for far better credit scores card supplies in the future.

The post Instantaneous Approval Bad Credit Cards – 3 Ways To Improve Credit Rating appeared first on ROI Credit Builders.

Instantaneous Approval Bad Credit Cards – 3 Ways To Improve Credit Rating

What misbehave Credit Cards?

There are 2 kinds of negative credit score debt cards. Guaranteed credit report cards ask candidates to send an application with a down settlement.

Usage Bad Credit Cards to Your Advantage

For beginners, keep reduced equilibriums. Credit report cards are not cost-free cash. If feasible, pay off the equilibrium each month.

In addition, send credit report card settlements on time. If you do not keep a great settlement background, the debt card firm might reduce your debt restriction.

If you are having a hard time developing credit history, poor debt cards can place you on the appropriate course.

The post Instantaneous Approval Bad Credit Cards – 3 Ways To Improve Credit Rating appeared first on ROI Credit Builders.

The post Instantaneous Approval Bad Credit Cards – 3 Ways To Improve Credit Rating appeared first on Buy It At A Bargain – Deals And Reviews.

Instantaneous Approval Bad Credit Cards – 3 Ways To Improve Credit Rating

What misbehave Credit Cards?

There are 2 kinds of negative credit score debt cards. Guaranteed credit report cards ask candidates to send an application with a down settlement.

Usage Bad Credit Cards to Your Advantage

For beginners, keep reduced equilibriums. Credit report cards are not cost-free cash. If feasible, pay off the equilibrium each month.

In addition, send credit report card settlements on time. If you do not keep a great settlement background, the debt card firm might reduce your debt restriction.

If you are having a hard time developing credit history, poor debt cards can place you on the appropriate course.

The post Instantaneous Approval Bad Credit Cards – 3 Ways To Improve Credit Rating appeared first on ROI Credit Builders.

Credit Suisse Chief Executive Resigns Amid Spying Scandal

Is It Possible to Get Vendor Credit for New Businesses? Yes!

Vendor credit accounts, also known as business tradelines, are vital to the business credit building process. However, getting vendor credit for new businesses can be tricky. It doesn’t happen overnight, but if you follow the process, it can happen.

Yes! It’s Possible to Get Vendor Credit for New Businesses

First, we have to define what a new business is in this context. When we discuss vendor credit for new businesses, we mean businesses in operation for less than a year. You can get starter vendor credit if you have been in operation for less than a year, but most require you to be in business for at least 6 months. There are a few that do not have a time in business requirement however.

Then, we have to define vendor credit. Vendor credit is credit from vendors that you make purchases from for your business. When it comes to vendor credit for new businesses, you need those that will offer credit without a credit check. This is because, as a new business, you have not yet had time to sufficiently build business credit.

When it comes to new businesses, some vendors will extend net terms and report your payments to the business credit reporting agencies (CRAs). For new business, they generally do not offer revolving credit, but that’s okay. That can come later. The whole point of vendor credit for new businesses is to help you build your business credit score so you can qualify for more types of funding.

What is a Business Credit Score and Why Do You Need One?

If the point of vendor credit for new businesses is to build your business credit score, it can be helpful to understand exactly why you need one. A business credit score is a credit score similar to your personal FICO credit score, but in the name of your business. It is not associated with you as the owner, or with your personal credit score.

The problem is, it doesn’t matter how much vendor credit you get, it will not count toward your business credit score if your business is not set up to be a separate entity from you as the owner. If it isn’t, any credit you get will just be applied to your personal credit report.

Set Your Business Up As A Separate Entity from Yourself

Here are some practical steps to take to create separation between your business and yourself.

Do Not Use the Same Contact Information

Make sure your business has its own phone number, fax number, and address. That’s not to say you have to get a separate phone line, or even a separate location. You can have a business number forwarded to your current phone. You can even still run your business from your home or on your computer. It’s not even necessary to have a fax machine.

EIN

Next, get an EIN. This is an identifying number for your business that works similar to how your SSN works for you personally. Some business owners use their SSN for their business transactions such as opening credit accounts. This is what a lot of sole proprietorships and partnerships do. However, it really doesn’t look professional to lenders, and it can cause your personal and business credit to get all mixed up. To be fundable, you need to apply for and use an EIN. You can get one for free from the IRS.

Incorporate As Soon As Possible

Incorporating is an absolutely necessary step. Not only does it play a huge role is separating a business from the owner, but it also lends credibility to your business as one that is legitimate. In addition, it offers some protection from liability.

Which option you choose does not matter as much for being fundable as it does for you budget and needs for liability protection. The best thing to do is talk to your attorney or a tax professional. If you do not do this from the beginning, there will be some issues to work through. When you incorporate, you become a new entity. This means you lose any time in business you already have. You basically have to start over. You’ll also lose any positive payment history.

This is why you have to incorporate as soon as possible. Not only is it necessary for fundability and for building business credit, but so is time in business. The longer you have been in business the more fundable you appear to be. That starts on the date of incorporation, regardless of when you actually started doing business.

Separate Business Bank Account

A separate, dedicated business bank account is also a must. There are a few reasons for this. First, it will help you keep business finances separate. This is good for a lot of reasons, but the big one is tax purposes.

However, there are also several types of funding you cannot get without a business bank account. Many lenders and credit cards want to see one with a minimum average balance. In addition, you cannot get a merchant account without a business account at a bank. That means, you cannot take credit cards payments. Studies show consumers spend more when they can pay by credit card.

Proper Licenses

If anyone were to check to see if your business has all of the licenses it needs to operate and finds that you do not, it will cause a massive hit to your credibility with that person. For a business to be legitimate, it has to have all of the necessary licenses it needs to run. If it doesn’t, warning flags are going to start waving. Research what licenses you need to ensure you have all of those necessary to legitimately run your business at the federal, state, and local levels.

Business Website

I am sure you are wondering how a business website can affect whether your business is separate from you as the owner. Here’s the thing. These days, a business doesn’t even really exist if there is no business website. Of course, that isn’t technically true, but practically is could be. The website is the first impression you make on many, and if it appears to be unprofessional it will not bode well for you with consumers or potential lenders.

Spend the time and money necessary to ensure your website is professionally designed and works well. Pay for hosting too. Don’t use a free hosting service. Also, your business needs a business email address that is different from your personal one. That goes along with separate contact information. Make sure it has the same URL as your website. A free service such as Yahoo or Gmail will not work the same way.

Why is Vendor Credit for New Businesses So Important?

After you have all these pieces in place, you can start applying to get vendor credit from starter vendors. These are those vendors we discussed earlier that will offer net terms and report payments. This is important because, if you have your business credit set up properly, those payments will start building positive credit history on your business credit report, and your business credit score will start to grow. With a strong business credit score, all kinds of funding options will be open to your business.

Where to Start to Get Vendor Credit for New Businesses

That’s the big question, right? Sure, you know you need vendor credit, but which vendors will actually extend these terms without a credit check? There are more than you may think, but here are a few to get you started.

Behalf.com

Behalf is way of getting paid through an app, but they also offer funding. The more you have your customers pay you through Behalf, the more likely Behalf is to offer you favorable terms when it comes to funding.

Funding can be through purchase financing or a virtual Mastercard option. Terms run from Net 30 to 180 days, and they report to Dun & Bradstreet, Experian, and Equifax. This fact alone, that they report to all the major credit reporting agencies, makes them an extremely valuable tool in building business credit.

Wells Fargo Business Secured Credit Card

This card is only available to Wells Fargo Online customers. Credit lines are available from $500 to $25,000, and there is a $25 annual fee. The grace period to pay is 21 days, and they offer purchase protection. You can apply for a Wells Fargo Business Secured Credit Card online, in a store, or by phone. They report to Business Experian.

Uline Shipping Supplies

Uline sells shipping, packing and industrial supplies. This means you can use them to purchase things you would use in the everyday course of business. You will need two trade references and a bank reference to get approval for net terms. In addition, they will usually only report payments on orders of over $50. They report to Dun and Bradstreet, so you will definitely need a D-U-N-S number before opening an account with them.

Also, your first few orders might need to be prepaid. It’s easy to apply. Just add an item to your cart, go to checkout, and choose the open an account option. Then, select the option to receive an invoice.

Quill Office Supplies

Quill is similar to Uline in that they sell packaging supplies. However, they also sell office and cleaning supplies. You have to have an established PAYDEX or place and initial order before you can apply for net terms. They report to D&B as well. If you place an order each month for 3 months you can usually get approval. Their application process is similar to Uline’s.

Grainger Industrial Supply

Grainger will approve almost anyone that has a business license for credit of less than $1,000. If you need over $1,000, they will ask to see trade and bank references. You can fax your application or apply over the phone.

What Happens After You Get Vendor Credit for New Businesses?

These are great to get started with, because it is super easy to get accounts reporting with them. That will get your business credit score started and allow you to get even more accounts reporting. Once you have several of these accounts, maybe 8 or 10, you can apply for different types of accounts.

The next credit tier after this vendor credit tier is the retail credit tier. This is commonly referred to as store credit. Retailers like Office Depot and Lowe’s offer these cards, but you can only use them at those particular stores or on their specific websites. However, after you get 8 or 10 of those reporting, you can move on to the next credit tier.

That would be the fleet credit tier. These are credit cards that companies like Shell and Fuelman offer to use exclusively for fuel costs and auto repair and maintenance. This is the last step in the business credit building process before the cash credit tier, which is the last tier.

This tier consists of those standard credit cards that are not regulated to a specific store or specific types of purchases. Generally, they have better interest rates and terms, and often they offer nice rewards.

Vendor Credit for New Businesses: A Word About Business Credit Monitoring

Pretty much the only way to start building business credit is with vendor credit from starter vendors. However, you have to be actively involved in the process. You must monitor your business credit reports on a regular basis for more than one reason.

First, you have to see which accounts are reporting. This is the only way to know when you have enough accounts reporting to qualify for approval for cards in the next credit tier. In addition, you need to keep an eye out mistakes and information that needs updating. Take action on this quickly, in writing, to keep them from affecting your fundability.

Vendor Credit for New Businesses Is Necessary for Building Business Credit

Unlike personal credit, you have to actively work to build business credit. After setting up your business to be a fundable entity separate from you as the owner, the next step is to find vendors that will extend credit and report payments to the business CRAs. Once you do that, if you handle your credit responsibly, the snow ball will only keep building.

The post Is It Possible to Get Vendor Credit for New Businesses? Yes! appeared first on Credit Suite.

What is Business Credit and How Does it Affect Fundability?

There is a lot of talk out there about what is business credit. That’s an important question, but it cannot be answered without another question coming up. That is, how does it affect fundability? Then of course, the question can be asked, what exactly is fundability? All of these questions build on each other.

What is Business Credit? It’s the Cornerstone of Fundability

The truth is, business credit is a huge piece of overall fundability. It isn’t everything, but I’d venture to say if how you set up your business is the foundation of fundability, business credit is the cornerstone. Consider how a building is made of thousands of stones, but one crack in the foundation or chink in the cornerstone can bring it all crashing down. The same is true of business credit. You can lose a stone here or there and, while it will definitely cause trouble, as long as the foundation and cornerstone are solid you have something to work with.

First, what is Fundability?

Before I can answer what biz credit is, I need to address fundability. In short, fundability is how a lender views a borrower in terms of credit risk. Most borrowers believe this has mainly to do with credit history. In part, this is true. It does have a lot to do with credit history. However, there is way more to it than that.

Pieces of the Fundability Puzzle

There are many things that affect fundability. Since it all connects to form a bigger picture, I like to think of it as a puzzle. The pieces of the puzzle can be named however, and it is easier to put them together if you work on them in order. If you work in order, the other pieces will usually fall into place pretty easily. You can still complete the puzzle if you work it differently, but it will be harder and take longer.

In the case of fundability, you should start with the foundation. Think of this as the corners and the edges of the puzzle. Everyone knows the puzzle goes faster if you start with those pieces, right?

Foundation of Fundability

There are many pieces that help a business form a fundable foundation. They are related to how your business is set up. It includes, among other things, being certain you incorporate your business. This is vital. Find out more about how to build a foundation of fundability, as well more about fundability in general, go here.

Next Comes Business Credit

After the foundation, business credit is one of the largest pieces of the puzzle. If you can get it into place, you will be able to start to see the bigger picture. It can take a while to build this piece however. It’s almost a smaller puzzle all on its own. More on business credit and how to build it later. For now, here are a few things that can affect your business credit that you might not realize.

Other Business Data Agencies

In addition to the business CRAs that directly calculate and issue your credit reports, there are other business data agencies that affect those reports indirectly. Two examples of this are LexisNexus and The Small Business Finance Exchange. These two agencies gather data from a variety of sources, including public records. This means they could have access to information relating to automobile accidents and liens. While you may not be able to access or change the data the agencies have on your business, you can ensure that any new information they receive is positive. Enough positive information can help counteract any negative information from the past.

Identification Numbers

In addition to the EIN, which is part of a fundable foundation, there are identifying numbers that go along with your business credit reports. You need to be aware that these numbers exists. Some of them are assigned by the agency. However, one of them you have to apply to get. It is important that you do this.

Dun & Bradstreet is the largest and most commonly used business credit reporting agency. Every credit file in their database has a D-U-N-S number. You have to apply for it. You can do so on the D&B website.

Business Credit History

Your credit history has to do with everything related to your credit score, which is a huge factor in the fundability of your business. Many things affect your business credit history, but the more accounts you have reporting on-time payments, the stronger your credit score will be.

Business Information

On the surface, it seems obvious that all of your business information should be consistent across the board. However, when you start changing things up you may find that some things get missed. This is a problem because a ton of loan applications are turned down each year due to fraud concerns simply of things not matching up.

Maybe your business licenses have your personal address but now you have a business address. You have to change it. Perhaps some of your credit accounts have a slightly different name or a different phone number listed than what is on your loan application. Do your insurances all have the correct information?

The key to avoiding this problem is to monitor your reports frequently.

Business and Personal Financial Statements

This encompasses a broad spectrum of things. First, both your personal and business tax returns need to be in order. Of course, you also need to be paying both your business and personal taxes.

Beyond that, it is best to have an accounting professional prepare regular financial statements. Having an accountant’s name on financial statements lends to the legitimacy of your business. If you cannot afford this monthly or quarterly, then at least have professional statements prepared annually. Then, they will be available whenever you need to apply for a loan.

Bureaus

There are several other agencies that hold information related to your personal finances. Everyone knows about FICO. Your personal FICO score needs to be as strong as possible. Almost all traditional lenders will look at personal credit in addition to business credit.

In addition to FICO reporting personal credit, there is ChexSystems. This keeps up with bad check activity. It can make a difference when it comes to your bank score. If you have too many bad checks, you will not be able to open a bank account. That will cause serious fundability issues.

For this point, everything comes into play. Have you ever been convicted of a crime? Do you have a bankruptcy or short sell on your record? How about liens or UCC filings?

Personal Credit Does Affect Business Fundability

Your personal credit score from Experian, Equifax, and Transunion all make a difference. You have to have your personal credit in order because it will definitely affect the fundability of your business. If it isn’t great right now, get to work on it. The number one way to get a strong personal credit score or improve a week one is to make payments consistently on time.

Also, make sure you monitor your personal credit regularly to ensure to stay ahead of mistakes.

Application Process

So much plays into this that you may not even think about. First, consider the timing of the application. Is your business currently fundable? If not, do some work first to increase fundability. Next, make sure that your business name, business address, and ownership status are all verifiable. Lastly, make sure you choose the right lending product for your business and your needs. Do you need a traditional loan or a line of credit? Would a working capital loan or expansion loan work best for your needs? Choose the right product to apply for can make all the difference.

But What is Business Credit?

Now that you see how business credit is just a piece of the bigger picture of fundability, it is easier to put it into context. There is still the all-important question of what is business credit left to answer however. At its core, business credit is to your business what your personal credit score is to your personal finances. Lenders use it to help determine whether you are a good credit risk, or not.

Here’s the thing. Business credit does not build passively like you personal credit does. You have to actively work to build it. The first step in this process has to do with how you set up your business. It is exactly the same as setting up your business with a foundation of fundability. You cannot build business credit without a fundable foundation.

Why Do You Need It?

As noted above, business credit is just a piece of what makes a business fundable. Another piece is the personal credit of the owner. That being the case, along with the fact that business credit simply builds as a result of your personal payment history, why do you even need business credit?

Here’s why. Having separate business credit can free up your personal credit from business transactions. If you have a ton of business debt on your personal credit report, it could make it hard for you to get a loan for things such as a home or a car.

What is Business Credit and How Do You Get It?

Now that we’ve answered the question of what is business credit, you need to know how to get it. There is a process for building business credit, and if you follow it, you will be successful. The first step is that foundation. The next step is getting accounts to report your on-time payments to your business credit rather than your personal credit.

This is trickier than you may realize at first. Similar to personal credit, it is hard to get business credit without already having business credit. We know how to get around this however.

Vendor Credit Tier

First you need to establish trade lines that report your payments to the business CRAs. This is also known as the vendor credit tier. Then you’ll have an established credit profile, and you’ll begin building a business credit score. With an established business credit profile and score you can begin to get credit in the retail and cash credit tiers.

These kinds of accounts are usually for the things bought all the time, like marketing materials, shipping boxes, outdoor workwear, ink and toner, and office furniture.

What is trade credit? These trade lines come from credit issuers who will extend credit in the form of net 30, 60, or 90-day invoices without checking your credit. This is not revolving credit, but since they report to the business CRAs, it serves the purpose anyway.

Of course, not all vendors will do this. You need merchants that grant an approval with very little effort. You also need them to be reporting to one or more of the big three CRAs. These are Dun & Bradstreet, Equifax, and Experian.

You want 5 to 8 of these to move onto the next step, which is the retail credit tier. Go here for more about the vendor credit tier and a list of a few starter vendors to get you going in the right direction.

Retail Credit Tier

Once there are 5 to 8 or more vendor trade accounts reporting to at least one of the CRAs, then move to the retail credit tier. These are businesses like Office Depot and Staples that issue credit cards for use at their stores only.

Fleet Credit Tier

Are there 8 to 10 accounts reporting? Then move onto the fleet credit tier. These include service providers like BP and Conoco. You can only use this credit to purchase fuel, and to fix, and take care of vehicles.

Cash Credit Tier

This is the top tier. If you have been using your credit in the other tiers responsibly, you should have a well-established credit score and be able to apply for credit in this tier. These are general Visa, Discover, and Mastercard options that are not limited by location or type of purchase. They also generally have better rates and rewards.

What is Business Credit? Vitally Important!

Business credit is hugely important to the success of your business. It can open opportunities to funding that you would not have otherwise. It does take some time and some work to build it, but your business will be better off for it.

The post What is Business Credit and How Does it Affect Fundability? appeared first on Credit Suite.

You Too Can Get a Bad Credit Business Credit Card

Need a bad credit business credit card? Poor personal credit does not have to affect whether you get a business credit card.

The Best Bad Credit Business Credit Card

We researched every bad credit business credit card we could find for you. So, here are our preferences.

Per the SBA, small business credit card limits are a whopping 10 – 100 times that of consumer credit cards!

This demonstrates you can get a lot more money with business credit. And it also shows you can have personal credit cards at retail stores. So, you would now have an additional card at the same retailers for your business.

And you will not need collateral, cash flow, or financials to get business credit.Bad Credit Business Credit Card Benefits

Perks can vary. So, make certain to choose the benefit you like from this assortment of alternatives.

Get a Secure Bad Credit Business Credit Card for Average Credit

Capital One® Spark® Classic for Business

For average credit, we like the Capital One Spark Classic for Business. It has no yearly fee. There are cash-back rewards. The card earns an unlimited 1% cash back on all purchases. There is an annual fee of $0.

With this card, you will get benefits including an auto rental collision damage waiver, and purchase security. And you also get extended warranty coverage. And you get travel and emergency assistance services.

But BEAR IN MIND: the ongoing APR is 24.74% variable APR. And the penalty APR is even higher, 31.15%. Also, there is no sign-up bonus.

Get it here: https://www.capitalone.com/small-business/credit-cards/spark-classic/

Get a Bad Credit Business Credit Card and Build Your Credit

Discover it® Student Cash Back

Make sure to check out the Discover it® Student Cash Back card. It has no yearly fee. The credit card also offers a six-month introductory period of 0% APR on purchases. And there is an APR of 14.99 – 23.99% variable on all purchases after that period.

One distinct feature is that it offers an incentive for scholars to maintain good grades with a $20 statement credit. If students earn a GPA of 3.0 or better each school year, the card will award the $20 statement credit every year for up to five years.

Details

Use this card to build personal credit. While this is a personal card versus a company credit card, for new credit users, their FICO scores will matter. And this card provides an excellent way to raise FICO while also getting rewards.

You can get 5% cash back at different places each quarter like grocery stores, gas stations, restaurants or Amazon.com up to the quarterly maximum. After that, this card offers unlimited 1% cash back on all purchases.

In the first year, all cash back rewards are matched 100%.

Downsides include a cash advance fee of either $10 or 5% of the amount of each cash advance, whichever is greater. And even though they waive the first late payment fee, a fee of up to $37 applies on all other late payments. There is also a returned payment fee of up to $37.

Get it here: https://www.discover.com/credit-cards/cash-back/it-card.html

Get a Bad Credit Business Credit Card with a Low APR/Balance Transfers

Discover it® Cash Back

Have a look at the Discover it® Cash Back card. There is a 10.99% introductory APR for six months from date of first transfer. So, this is for transfers under this offer which post to your account by January 10, 2019.

After the introductory APR expires, your APR will be 14.99% to 23.99%. So, this is based on your creditworthiness. Your APR will vary with the market, which is based upon the Prime Rate.

Details

You can earn 5% cash back at different places every quarter. So, these are places like gas stations, grocery stores, restaurants, Amazon.com, or wholesale clubs. But this is up to the quarterly maximum each time you activate. In addition, automatically get unlimited 1% cash back on all other purchases.

You will earn an unlimited dollar-for-dollar match of all the cash back you have earned at the end of your first year, automatically.

Get it here: https://www.discover.com/credit-cards/cash-back/it-card.html

Get an Ironclad Secured Bad Credit Business Credit Card

Wells Fargo Business Secured Credit Card

Look at the Wells Fargo Business Secured Credit Card. It charges a $25 yearly fee per credit card (up to 10 employee cards). It also requires a minimum security deposit of $500 (up to $25,000) and it is meant to help cardholders build or rebuild their credit.

Choose this credit card if you want to earn 1.5% per dollar in purchases without any limits or get one point for every dollar in purchases. You also get 1,000 bonus points for every month your company makes $1,000 in purchases on the card.

Details

Also, you get free FICO scores every month. There are no foreign transaction fees. It is possible to upgrade to unsecured credit. Your account is regularly reviewed. And you may become eligible for an upgrade to an unsecured card with responsible use over time. Approval is not guaranteed and depends on factors including how you manage this and your other accounts.

APR is the current prime rate plus 11.90%. There is no introductory APR period and no sign-up bonus. This is not a credit card for balance transfers.

Get it here: https://www.wellsfargo.com/biz/business-credit/credit-cards/secured-card/

Get a Bad Credit Business Credit Card with 0% APR – Pay Absolutely Nothing!

Bank of America® Business Advantage Travel Rewards World Mastercard® Credit Card

The Bank of America® Business Advantage Travel Rewards World Mastercard® credit card has no annual fee and comes with a 0% introductory APR on purchases for the initial nine months. After that, the card has a 13.24 – 23.24% variable APR

Earn 3 points/dollar spent when you book travel through the Bank of America Travel Center and 1.5 points/dollar on all other purchases. You can get unlimited points and points will never expire.

Details

There is a 25,000-point sign-up bonus when you spend $1,000 within the initial 60 days of opening the account. Cardholders get travel accident insurance, and lost luggage reimbursement.

They additionally get trip cancellation coverage, trip delay reimbursement and other benefits.

There is no introductory rate for balance transfers. Also, bonus categories are limited.

Get it here: https://www.bankofamerica.com/smallbusiness/credit-cards/products/travel-rewards-business-credit-card/

JetBlue Plus Card

Consider the JetBlue Plus Card for an additional offer of a 0% introductory APR

Earn six points/dollar on JetBlue purchases, two points/dollar at eateries and grocery stores. And get one point/dollar on all other purchases.

Details

Spend $1,000 in the first 90 days and pay the yearly fee. So, then you can get 40,000 bonus points. New cardholders receive a 12 month, 0% introductory APR on balance transfers made within 45 days of account opening.

After that, the variable APR on purchases and balance transfers is 17.99%, 21.99% or 26.99%, based upon creditworthiness. Benefits include a free first checked bag and 50% savings on in-flight purchases.

There is a $99 yearly fee for this card.

Get it here: https://cards.barclaycardus.com/cards/jetblue-card/

Get an Extraordinary Bad Credit Business Credit Card with No Annual Fee

Uber Visa Card

Check out the Uber Visa Card. Uber is the very first ride-sharing service to offer a credit card, in a partnership with Visa and Barclays.

The card provides 4% back per dollar spent at restaurants, takeout and bars, including UberEATS. Also, earn 3% back on hotel, airfare and vacation home rentals. And earn 2% back on online purchases.

So, this includes retailers and subscription services such as Uber and Netflix. And earn 1% back on all other purchases. Each percent/point has a value of 1 cent. Redeem points for cash back, gift cards or Uber credits directly in the app.

By spending a minimum of $500 in the first 90 days, users can earn a $100 sign-up bonus. Cardholders spending a minimum of $5,000 annually are eligible to receive a $50 credit toward online subscription services.

Details

If you pay your cellular phone bill with this card, you are insured up to $600 for cellphone damage or theft.

Cardholders are eligible for exclusive access to specific events and offers. Uber expects the majority of these offers will be available in major cities like New York, San Francisco, Los Angeles, Chicago and DC. There is no foreign transaction fee.

But there is no introductory rate. So the APR is a variable 16.99%, 22.74% or 25.74%, based on your creditworthiness. Cardholders with less than stellar credit will be on the higher end of the range.

Also, there are restrictions on Uber credits. To redeem points as credits in the Uber app, accrue a minimum of 500 points, or $5. Cardholders can convert a maximum of 50,000 points, or $500, per day.

Get it here: https://www.uber.com/c/uber-credit-card/

Costco Anywhere Visa® Business Card by Citi

Not taking Uber? Then you’ll need to fill your gas tank someway. Why not do so with the Costco Anywhere Visa® Business Card by Citi?

This card earns cash back with every purchase. Get 4% cash back on the first $7,000 spent on eligible gas purchases annually (1% after that). Get 3% cash back at restaurants and on eligible travel purchases. Also, get 2% cash back at Costco and Costco.com. And earn 1% cash back on all other purchases.

So note: the $0 yearly fee is only for Costco members. And an active Costco membership is required. Cardholders will get access to damage and theft purchase protection, extended warranty coverage and travel accident insurance.

Also, there is no sign-up bonus available with this card.

Get it here: https://www.citi.com/credit-cards/credit-card-details/citi.action?ID=Citi-costco-anywhere-visa-business-credit-card

Ink Business Cash℠ Credit Card

Check out the Ink Business Cash ℠ Credit Card. Businesses can get cash back with each purchase. Spend $3,000 in the initial three months from account opening. And you’ll get a $500 bonus cash back.

There is a $0 yearly fee with a 0% introductory APR for 12 months on purchases and balance transfers. Thereafter, the APR is a 15.24 – 21.24% variable.

The card includes travel and purchase coverage benefits. So, this includes an auto rental collision damage waiver and extended warranty protection.

Details

Earn additional cash back on business categories. So, these include office supply stores, telecommunications, gas stations and restaurants.

Note: this card has a balance transfer fee. Pay 5% of the amount transferred or $5, whichever is more. Also, there is a foreign transaction fee of 3%.

Get it here: https://creditcards.chase.com/small-business-credit-cards/ink-cash

United MileagePlus Explorer Business Card

Get a good look at the United MileagePlus Explorer Business Card.

Earn 2 miles/dollar with United and at restaurants, gas stations and office supply stores. All other purchases get 1 mile/dollar. Earn a 50,000-mile sign-up bonus after spending $3,000 in the first three months from account opening.

Benefits include priority boarding, a free first checked bag for you and a companion on the same reservation.

Details

Also, get two United Club passes annually. And get hotel and resort perks including upgrades. In addition, get early check-in and late checkout. And get an auto rental collision damage waiver.

And also, get baggage delay insurance, lost luggage reimbursement, trip cancellation and interruption insurance. Finally, get trip delay reimbursement, purchase protection, price protection and concierge service.

After the first year, the card has an annual fee of $95. APR of 17.99% – 24.99%, based on creditworthiness.

Get it here: https://creditcards.chase.com/small-business-credit-cards/united-mileageplus-explorer-business

Starwood Preferred Guest® Business Credit Card from American Express

Another alternative is the Starwood Preferred Guest Business Credit Card from American Express.

This card is for those who stay at Starwood Preferred Guest and Marriott hotels often. Earn six points per dollar of eligible purchases at participating SPG and Marriott Rewards hotels.

And earn four points per dollar at American restaurants, US filling stations, and on US purchases for shipping.

Also, earn four points to the dollar on wireless telephone services purchased directly from US service providers. For all other eligible purchases, get two points per dollar.

Details

Earn 75,000 bonus points when you spend $3,000 in the first three months of account opening. Benefits include free in-room premium internet access, Sheraton Club lounge access, and purchase protection.

Plus, you get car rental loss and damage insurance. And you get baggage insurance. There is also a global assistance hotline. And there is a roadside assistance hotline. And get travel accident insurance and extended warranty coverage.

The biggest issue is the annual fee. There is a $0 introductory annual fee for the first year, then it’s $95 after that. Plus, there is no 0% introductory APR. Instead, there is a 17.74 – 26.74% variable APR

Get it here: https://www.americanexpress.com/us/credit-cards/business/business-credit-cards/spg-amex-starwood-credit-card

Get a Terrific Bad Credit Business Credit Card for Cash Back

SimplyCash Plus Business Credit Card from American Express

Consider the SimplyCash Plus Business Credit Card from American Express. There is a $0 yearly fee. And there is a 0% APR on purchases So this is for the first 15 months an account is open.

But when the introductory period ends, the APR for purchases is 14.24 to 21.24%. So, this is variable and based on creditworthiness.

Details

This card has several benefits. These include purchase protection, car rental loss and damage insurance. And they also include a baggage insurance plan, extended warranty coverage and a global assist hotline.

Also, get 5% cash back at US office supply stores and on wireless phone services. So, these must be purchased from US providers. But this pertains to the initial $50,000 of yearly spending. Then, you get 1% cash back.

You also earn 3% cash back on spending category of your choice. So, this is from eight distinct categories. They include airfare, gas, advertising and computer purchases. But it applies to the first $50,000 of yearly spending. Then, you earn 1% cash back.

Cash-back bonuses are automatically credited to the customer’s billing statement.

Note: you cannot use this credit card for balance transfers. There is a foreign transaction fee of 2.7%. The card charges up to $38 in late fees. And the returned check fee is also $38. The penalty APR is 29.99%.

And, it kicks in if you have two or more late payments within 12 months. It can also apply if you fail to make the minimum payment on time or have a returned payment.

Get it here: https://www.americanexpress.com/us/small-business/credit-cards/simply-cash-plus-business-credit-card/44279

Capital One® Quicksilver® Card

Look at the Capital One® Quicksilver® Card. It offers flat-rate rewards of 1.5% on all purchases. There are no limits to the amount of cash back rewards that cardholders can earn. Also, the card has a $0 annual fee.

New cardholders have a 0% APR on purchases and balance transfers for the first 15 months after opening the account. And then they have a 14.74 – 24.74% (variable) APR after that.

A cash bonus of $150 is available for those who make a minimum of $500 in purchases within 3 months of account opening.

Details

Also, cash back rewards do not expire for the life of the account. And there is no limit to how much you can earn.

This card also offers travel accident insurance. And you get an auto rental collision damage waiver. There are no foreign transaction fees. And there is extended warranty coverage.

Downsides are the flat reward rate, not allowing for any more than that. And the higher APR after the first 15 months.

Get it here: https://www.capitalone.com/credit-cards/quicksilver/

Get an Unbeatable Bad Credit Business Credit Card for Jackpot Rewards

Chase Sapphire Preferred® Card

Check out at the Chase Sapphire Preferred® Card for travel points.

You can earn two points to the dollar spent on travel and dining at restaurants. And you can get one point per dollar on all other purchases. Points can be redeemed for cash back, gift cards, or travel.

The card’s benefits include trip cancellation insurance, travel and emergency assistance services. They also include an auto rental collision damage waiver, purchase protection and extended warranty protection.

When you spend $4,000 in the initial 3 months from account opening, you will get 50,000 bonus points. These points are worth $625 if you redeem them for travel through Chase Ultimate Rewards.

Details

You can get an unlimited two points per dollar for travel and dining at restaurants. Then afterwards earn one point per dollar for all other purchases. Points will transfer equally to 13 leading frequent travel programs with partners. So, these include British Airways, Southwest Airlines, United, and Marriott.

There is no 0% introductory APR on purchases or balance transfers. The card’s standard APR is 17.74 – 24.74% variable. Also, the card has an annual fee of $0 introductory for the first year. And then it skyrockets to $95.

Get it here: https://creditcards.chase.com/rewards-credit-cards/chase-sapphire-preferred

Ink Business Preferred ℠ Credit Card

Get a look at the Ink Business Preferred Credit Card from Chase. Cardholders earn 3 points for every dollar spent on travel, shipping, internet, cable, phone and qualifying advertising with the card. So, this is up to $150,000 each year. And all other purchases earn an unlimited one point per dollar spent.

This is a Visa card.

Cardholders get benefits like purchase protection, trip cancellation or interruption insurance. They also get cellphone protection. And they get extended warranty coverage. And they get an auto rental collision damage waiver.

Details

Earn 80,000 bonus points when you spend $5,000 in the first 3 months from account opening. There is an annual fee of $95. You can add employee credit cards at no additional cost.

This card only offers 3 points per dollar to a limit of $150,000 a year. So, this is for travel, shipping, internet, cable, phone and qualifying advertising. All other purchases get an unlimited flat rate of one point per dollar. And there is no introductory APR

Get it here: https://creditcards.chase.com/small-business-credit-cards/ink-business-preferred

The Perfect Business Credit Cards for You

Your outright best bad credit business credit card will hinge on your credit history and scores.

Only you can pick which features you want and need. So, make sure to do your homework. What is excellent for you could be catastrophic for somebody else.

And, as always, be sure to establish credit in the recommended order for the best, speediest benefits.

The post You Too Can Get a Bad Credit Business Credit Card appeared first on Credit Suite.

Monitor Your Credit Score at D&B, Experian, and Equifax

While there are a number of other business credit reporting agencies out there, D&B, Experian, and Equifax are known as the big three. Not surprisingly, they are the largest and most commonly used. As such, their reports have an influence on lenders when it comes to making lending decisions. This means that it is vital to your business to monitor your credit score with these companies. How do you do that? What does your score even mean? What else are the reports telling lenders?

Monitor Your Credit Score and Understand What It is Telling Lenders

Your business needs funding to survive. Of course, your business credit score plays a huge role in the fundability of your business. If you do not understand your score and the rest of the report however, you can’t do anything about it. You have to know what reports the CRAs are showing lenders, what is on them, and how they are used. To do this, you have to monitor your credit score.

Monitor Your Credit Score: Dun & Bradstreet

Dun & Bradstreet offers a number of business credit reports. In fact, there are six in all. Each contains varying information that is meant to alert lenders to your creditworthiness, or lack thereof.

The PAYDEX is the report lenders use most often. Likely, this is because it is most similar to the consumer FICO. It measures payment history on a scale of 1 to 100. A 70 or higher is acceptable. For context, a score of 100 shows payments are made in advance. A score of 1 indicates that they are 120 day, or more, past due.

The other Dun & Bradstreet Credit Reports include:

Dun and Bradstreet Delinquency Predictor Score

The delinquency predictor score measures how likely it is that the company will not pay,

will be late paying, or will fall into bankruptcy. On a scale of 1 to 5, a 2 is good.

Financial Stress Score

As you might imagine, the financial stress score measures pressure on the balance sheet. As a result, it shows how likely the company is to shut down within 12 months. These scores range from 5 to 1, and a score of 2 is good.

Supplier Evaluation Risk Rating

This one ranks the odds of a company surviving for a year. The minimum score is a 9 and the

maximum is 1. A good score is 5.

Credit Limit Recommendation

As its name indicates, this is a recommendation that reflects a business’s borrowing capacity. Even more, it is a guide for how much debt a company can handle. Typically, creditors use this to

determine how much credit to extend.

D&B Credit Rating

This is a rating that ranks business risk on a scale of one to four. A score of 2 is good. The rating is

given in conjunction with letters, the combination of which indicate a company’s net worth.

Monitor Your Business Credit: Experian Commercial

Experian uses what it calls Intelliscore for its ranking. This involves more than 800 unique factors combined to predict a company’s credit risk. With Intelliscore, a score of 76 or higher indicates a low risk of default. If a score falls between 51 to 75, it shows a low to medium risk. Scores from 26 to 50 are medium risk. Lastly, from 25 down to 1 is medium high to high risk.

Experian offers a number of other scores including:

Intelliscore Plus

The Intelliscore Plus is a predictive percentile score that indicates the likelihood that a business will be seriously delinquent, or have a major financial issue, in the next year.

It uses more even more factors to calculate a score than the original Intelliscore. Payment history still accounts for 5 to 10%. However, current payment status, trade balances, and percent of accounts delinquent make up 50 to 60% of the score. Credit utilization, company profile, age of the business, industry risk, and public records account for the rest. Public records include:

liens
judgements
collections
bankruptcies
other derogatory items

Data comes from suppliers, lenders, legal filings, collection agencies, credit card companies, and of course public records.

The Experian Financial Stability Risk Score (FSR)

This predicts the potential of a business defaulting on its obligations or going bankrupt. The score identifies high risk businesses using public records. These records include high use of credit lines, severely delinquent payments, tax liens, judgments, collection accounts, risk industries, length of time in business, etc.

Experian’s Blended Score

This is a one pager that provides a quick look at the business and its owner. A combined business-owner credit scoring model is more comprehensive than a business only or consumer only model. Blended scores have been found to outperform consumer or business alone by 10 – 20%.

Monitor Your Credit Score: Equifax Business

Equifax business combines financial data with industry trade data, and then adds in utility and telephone payment data. They also use public records information.

Credit scores from Equifax Business include:

The Small Business Credit Risk Score for Suppliers

This ranks on a scale 1 to 100, with 90+ indicating that a business has paid its obligations as agreed. An 80 to 89 means they are 1 to 30 days past due, 60 to 79 indicates they are 31-60 days overdue, and a score of 40 to 59 is 61 to 90 days past the date the payment was due. In the same way, score simply decrease further from this point.

Business Failure Risk Score

This score indicates the chance of a company paying its bills late on the following scale:

497 – 816: 25% or less chance of payment being late
452 – 496: 26 – 50% chance of late payment
415 – 451: 51 – 74% chance of late payments

101 – 414: 75 – 100% chance of late payments

Public Records Report

The purpose of this report is to list bankruptcies, judgments, and liens along with the amount, date of the most recent filing, and how they were satisfied.

Credit Usage Report

This is a pie chart that gives a visual of your company’s credit usage. It is a way to see in picture form what percent of your available credit you are using. That is known as your credit utilization ratio, and it has a pretty big impact on your overall credit score.

Credit Report Summary

The summary report shows the number of your business’s credit accounts, as well as the date each one became active. It also lists any amounts past due, along with your most severe status of the past 24 months.

The highest amount of credit extended, the median balance, and the average open balance are also included.

Additionally, the report lists recent activity such as number of new accounts opened recently, delinquent accounts, number of updated accounts, and inquiries.

Financial Account Highlights

This report shows details for the past 36 months, including credit accounts and leases. It lists the status, open and close dates, and original and current credit limits. It also shows any past due amount for each. In addition, the payment amount and frequency for each account, as well as its security status can be seen.

Monitor Your Credit Score: How Can You See Your Reports?

Now that you know what reports each of the big three offers, you need to know how to see what yours are telling lenders about your business. That’s the whole reason you monitor your business credit. It can help you get an idea of the fundability of your business. Unfortunately, you cannot get a free copy of your business credit reports like you can with your personal credit reports. It costs money to monitor your business credit as a general rule.

For example, the big three charge close to $50 or more for each report:

Dun & Bradstreet reports range in price from $61 to $229 per report.
Experian reports are $49.95 per report.
Equifax is $99.95 per report.

However, you can monitor your credit with D&B and Experian at a fraction of these costs by going to https://www.creditsuite.com/monitoring/.

Knowing this, there are some one-time options for seeing at least some of the information on some of your credit reports for free. These typically come in the form of a free trial.

Monitor Your Credit: See Your Credit Report for Free

The only real way to get a free copy of your credit report is if you are denied a loan based on your business credit. Of course, this is not a fun way to see your business credit reports for free. After denial, you will receive a letter in the mail from the agency that provided the lender with your report. You will have the opportunity to request a free copy of the report that the lender saw, so that you can see why the result was a denial. You have 90 days to submit your request.

In addition to business loan denial, there are a few other options.

Nav

Nav is a service that will let you see a summary of your credit reports from all three of the major credit reporting agencies. However, these are only summaries, not full reports. Generally, that means you can see your score, and maybe the accounts you have listed. While this will help you see where you stand, it will not suffice for the purpose of correcting mistakes or even to show you what you need to do to improve your score. You do have the option to pay for more information though.

Credit.net

While Credit.net does not offer ongoing free business credit reports, you can access a free trial. There is no credit card required, and after you pull the report, you have 30 days to check it out. This means at least once you can get a totally free look at your report, because there is no fear of missing a cancellation deadline and having to pay anyway.

Scorely

This is a lesser known credit reporting agency that will let you see your credit report for free before you pay for an ongoing subscription. Unlike Nav or Credit.net, they actually calculate their own score similar to the big 3 (Experian, Equifax, and Dun & Bradstreet.) They strive to be totally transparent and to make their reports easy to understand.

Monitor Your Credit Score: What Can You Do About It?

First, if your business score contains mistakes, you can dispute them. Then, you can have the mistakes taken off. It needs to be in writing directly to the credit reporting agency. In addition, you will need to include backup documentation that supports your argument. Do not send originals however. Instead, send copies.

In contrast, if there are no mistakes but your credit is still lacking, start now making payments on time. Furthermore, ask telephone and utility accounts to report your on time payments to the CRAs. They are not required to, but some will if you ask. Additionally, ask your landlord to report your rent payments. Also, work with starter vendors that will offer net 30 invoices without a credit check and that will report your payments. Go here to find a few to start with.

Most importantly, pay your bills on time. This is the number one way to increase your business credit score.

Monitor Your Credit Score: The More You Know the More You Grow

You can’t know how to fix a problem until you know the problem exists. This is why it is important to monitor your credit score. Once you know your score and whatever else your reports say about your business, you can figure out what to do about it. Knowing is half the battle.

Once you know what information lenders are seeing about your business, you can take action that will help you become more fundable. Maybe you need to get more diligent about making payments on time. Perhaps you need to dispute mistakes or add accounts. Regardless, you will have no clue what you need to do if you do not monitor your credit. By keeping an eye on things, you can be sure your business has access to the funding it needs to grow and thrive.

The post Monitor Your Credit Score at D&B, Experian, and Equifax appeared first on Credit Suite.

What is Your Business Credit File and Why Does it Matter

What you don’t know about your business credit file can hurt you. You see, your business credit file is to your company as your personal credit file is to you as an individual. It details your credit history. In addition, it makes predictions about your ability to repay debts both now and into the future. These predictions are based upon not only your credit history, but also company finances and data received from other sources, such as public records. Lenders use it to help determine whether or not to lend to your business.

Your Business Credit File Affects Your Fundability, and That’s a Big Deal

The thing is, your business credit file isn’t the only thing they use. It is simply a piece of a bigger puzzle known as fundability. When lenders look at your credit file, they are looking at it with fundability in mind. What is fundability? It is, overall, how your business looks to lenders in regards to return on investment.

Lenders are in it for the profits. If you do not pay back the debt, they do not make money. Therefore, they only approve loans to those businesses that appear to be fundable. These are business that have all their ducks in a row. All licensees are in place. Contact and ownership information is complete, dedicated, and verifiable. There is a business bank account, and bills are being paid. All of this and more, including your business credit file, come together to create a complete fundability picture. Find out more about fundability and how to become fundable here.

How to Start a Business Credit File

Unlike your personal credit file, your business credit file is not something that occurs passively. For it to be complete and correct, you have to take action. This looks different depending on the business credit reporting agency (CRA.) Some of them do automatically open a file once a business starts opening accounts and those accounts start reporting. However, if that business is not set up properly to build business credit, the information will be all tangled up with personal information and will not accurately reflect the creditworthiness of the business itself.

Other CRAs requires you to manually take action to open an account specifically with them. For example, with Dun & Bradstreet you have to get a D-U-N-S number.

Other than that, the main thing to do is get accounts reporting to the business CRAs. There are several, but the most commonly used are Dun & Bradstreet, Experian, and Equifax. The key is to open business accounts that will report your payments to these agencies. With some, you can also self-report accounts to get your credit rolling, but that isn’t always the best idea.

Self-reporting

Dun & Bradstreet and Equifax each allow you to self-report your payments on accounts. If you are already in business with vendors that will not report payments, and you cannot make a change, this may be an option.

Don’t forget you have to have a D-U-N-S number before you start reporting to D&B. If you don’t have that number already, accounts reported will not matter. Also, it costs money to self-report.

Additionally, they will try to sell you other products in the process. If these products will be useful to you, feel free to consider them. Just know that they are not necessary to open your business credit file. In fact, many of the products and services you will be offered are provided for free by other companies.

If you choose to self-report with Equifax, you will have to meet certain minimum requirements. For financial businesses, this means you must have a minimum of 500 vendors to report, and all other businesses must have a minimum of 2,000 vendors.

Experian does not allow self-reporting, but rather relies on verified information from third-parties. In fact, if you are currently running a business, you probably already have a business credit file with Experian.

While it is allowed, self-reporting can be costly. Not only that, but it doesn’t always result in a score increase. Accounts will report to your business credit file for free anyway if you handle things properly.

It is better to ensure your good credit practices are reported to all three credit agencies by verified third parties rather than self-reporting. How does this happen?

Check with Current Vendors

If you have any current vendor relationships, find out if they report your payments to the credit agencies. If they do not, ask them to do so. They don’t have too, but if they won’t, see about finding other vendors that will. While it isn’t always possible to switch vendors, it is worth it to try.

For future vendors, ask the question before you begin a business relationship. This will help establish a business credit file from the beginning.

Work with Vendors in the Vendor Credit Tier

The credit tiers are a new concept for many business owners. Here is how it works. You start by opening accounts with vendors, often called starter vendors, in the vendor credit tier. These are vendors that will extend net 30 terms without a credit check, and then report your payments to the business credit reporting agencies.

After you get enough of these reporting, you can apply for credit cards in the retail credit tier, the fleet credit tier, and the cash credit tier, in that order. Find out more about starter vendors and the process of working through the credit tiers here.

Get a Business Credit Card

Virtually all credit card companies report to the credit agencies. Use your business name and contact information and apply for a business credit card. You may have to make do with a lower credit limit and higher interest rate early on if you do not yet have a business credit score. However, once you build your credit file a bit, you can ask for an increase in limit or apply for a card with more favorable terms.

Remember to look for cards with other perks as well. A few examples of business credit cards and the perks they offer include:

- Capital One Spark Cash for Business– unlimited 2% cash back on all purchases, which can add up to a lot over the course of a year. In addition, you get a 0% introductory APR and, if you spend $4,500 in the first 3 months, you qualify for a $500 cash sign up bonus.
- Chase Ink Business Unlimited- unlimited 1.5% cash back on all purchases, and you can earn a $500 cash bonus here too. There is no annual fee, and you get 0% on balance transfers and purchases for 12 months.

Ink Business Cash Credit Card- 0% APR for 12 months and 5% cash back on purchases made in certain business categories, as well as a $500 sign up bonus.

Be aware that you probably will not qualify for these immediately if your business credit file is new or incomplete. Once you get the ball rolling and have a strong business credit score however, these should be accessible.

Ask Utilities to Report Payments

Most utilities do not report payments to credit agencies. Furthermore, they don’t have to. However, some of them will report if you ask. The worst they can say is no. Then, if they say yes and you pay on time, it can only help you.

Consider Taking Out a Private Business Loan

Some private lenders will offer business loans with a low credit score and report payments to business credit reporting agencies. Here are a few to consider.

BlueVine

Many private lenders offer options more similar to invoice factoring and lines of credit. Why? These types of products present less risk than straight term loans.

The minimum loan amount available from BlueVine is $5,000 and the maximum is $100,000. Annual revenue must be $120,000 or more, and the borrower must be in business for at least 6 months. Personal credit score has to be 600 or above. Also, BlueVine does not offer a line of credit in all states. You can find out more in our review here.

They report to Experian. They are one of the few invoice factoring companies that will report to the business credit bureaus.

Fundation

Fundation offers a fast automated process. Originally, they only offered invoice financing. Later, they included the line of credit service. Repayments are automatic. They draft them electronically on a weekly basis. One thing to remember is that repayment could be as high as 5 to 7% of the amount you have drawn currently. This is because the repayment period is relatively short.

You can get loans for as little as $100 and as high as up to $100,000, but the max initial draw is $50,000. They do have some products that go up to $500,000. Though there is no minimum credit score requirement, they do require at least 3 months in business, $50,000 or more in annual revenue, and a business checking account with a minimum balance of $500.

Fundation reports to Dun & Bradstreet, Equifax SBFE, PayNet, and Experian. As a result, they are a great option if you are looking to build a healthy credit file.

The Business Backer

These guys offer a product they call FlexFund Line of Credit. Funds vary in amounts from $5,000 to $240,000. Draws can be repaid on either a weekly or daily basis.

They report to Dun & Bradstreet and Equifax.

OnDeck

With OnDeck, applying for financing is quick and easy. Apply online, and you will receive your decision once application processing is final. Loan funds will go straight to your bank account. The minimum loan amount is $5,000 and the maximum is $500,000.

There is a personal credit score requirement of 600 or more. Also, you must be in business for at least one year. There is an annual revenue requirement of at least $100,000 as well. In addition, there can’t be a bankruptcy on file in the past 2 years. No unresolved liens or judgements are allowed either.

OnDeck reports to the standard business credit bureaus.

Credit Monitoring

You know what your business credit file is and how to start it. You have a toolbox full of tips to help make it stronger. Still, you have no clue what yours actually says. How can you find out what is on your credit file? Furthermore, how can you correct any mistakes on your file? That is where credit monitoring comes into play.

Monitoring your business credit file can help you get an idea of how it is affecting the fundability of your business. Unfortunately, you cannot get a free copy of your business credit reports like you can with your personal credit reports. It costs money to monitor your business credit as a general rule.

For example, the big three charge close to $50 or more for each report:

Dun & Bradstreet reports range in price from $61 to $229 per report.
Experian reports are $49.95 per report.
Equifax is $99.95 per report.

However, you can monitor your credit with D&B and Experian at a fraction of these costs by going to https://www.creditsuite.com/monitoring/.

What to Do If You Find a Mistake on Your Credit File

First, if you find any inaccuracies in contact information, simply update it. You will need to do so in writing. Next, look over reporting accounts. If you see any accounts that are not yours, you will also need to contact the company in writing. It is likely the mistake is due to another business having a similar name, so you may have to do some research and send in copies of your incorporation documents. You may also have to contact the company that is reporting the account.

If you find accounts reporting late or missed payments that you know are incorrect, notify the CRA of the mistake in writing. Send copies of supporting documentation showing that the payments were made and when they were made.

Monitoring your business credit file is vital to keeping it complete, accurate, and healthy.

Your Business Credit File Affects Fundability: It’s Important!

Your business credit file is only one part of the much bigger fundability picture. However, it is a hugely important part. In fact, without it, the whole picture is pretty much ruined. For your business to be fundable, your business credit has to be in order.

This means ensuring your business is set up as an entity separate from yourself, and making sure all your information is consistent across all channels.

The post What is Your Business Credit File and Why Does it Matter appeared first on Credit Suite.