Tag: Things

Pink Sheets – Investments Or Gambling On Sure Things?

Pink Sheets – Investments Or Gambling On Sure Things?

Pink Sheets and Wall Street have long since appealed to gamblers and investors. Wall Street’s version of the unwanted stocks has become big business. Investors are looking to what is commonly referred to as the “pink sheets” which list the stocks which are too small and often too much trouble for the boys on the Street to notice.

Enter into the picture a man by the name of Coulson. Cromwell Coulson bought the stock quotation service, Pink Sheets in the late nineties and since then, he has been quoted a few times as referring to the Pink Sheets as the “Las Vegas of Wall Street.” And here’s why. Companies which are relatively small with little trading action being realized have virtually no appeal to the New York Stock Exchange.

The Pink Sheets lists not only the smaller companies but also the foreign stocks. The stocks aren’t listed on the exchange and are certainly considered very volatile stocks.

Day trading quickly became known as the investor’s way to gamble years ago. Now, with the growing popularity of the Pink Sheets, investors can really go double or nothing with stocks which are more than just a little risky to the investor who needs some excitement when they are building their investment portfolios.

What investors need to realize when choosing to jump on board with Cromwell Coulson, CEO of Pink Sheets LLC, is that not only are the stocks listed on the Pink Sheets listed there for a reason but there is a very real and legitimate reason that these stocks aren’t on the more notable exchanges. Either they couldn’t make it while on the big exchanges or they weren’t there to begin with.

As one might expect, Pink Sheet stocks offer investors, for the most part, mediocre financial information on the company. Further, bleak financials of the companies listed on the Pink Sheets are often camouflaged or extremely difficult to find.

What’s more, day traders who love to jump in and out of their chosen stocks and tend to love volatile stocks will be less likely to trade on the Pink Sheets with much success if they “play the market” on these stocks as they would the stocks on the NYSE, for example.

Day traders will find the pendulum swinging both ways on stocks found on the Pink Sheets. They’ll be drawn to them because huge profits can be earned. They will definitely need to do their homework and recognize the fact that if a stock is listed on the Pink Sheets—that fact alone shows a warning will be ever-present. And traders will be very aware of the fact that because of the difference in bid and ask prices of these over-the-counter stocks, dumping the stock on short notice may be a problem, if even possible.

Still, Coulson seems to have a growing over the counter business in these stocks which no one else wants. Companies such as Delta Air Lines and Volkswagen found their homes in the OTC neighborhood. And with Coulson’s determination to see more stocks on his sheets of pink, his stocks, no matter how volatile, may begin to be considered a pretty good gamble.

The post Pink Sheets – Investments Or Gambling On Sure Things? appeared first on ROI Credit Builders.

Pink Sheets – Investments Or Gambling On Sure Things?

Pink Sheets – Investments Or Gambling On Sure Things?

Pink Sheets and Wall Street have long since appealed to gamblers and investors. Wall Street’s version of the unwanted stocks has become big business. Investors are looking to what is commonly referred to as the “pink sheets” which list the stocks which are too small and often too much trouble for the boys on the Street to notice.

Enter into the picture a man by the name of Coulson. Cromwell Coulson bought the stock quotation service, Pink Sheets in the late nineties and since then, he has been quoted a few times as referring to the Pink Sheets as the “Las Vegas of Wall Street.” And here’s why. Companies which are relatively small with little trading action being realized have virtually no appeal to the New York Stock Exchange.

The Pink Sheets lists not only the smaller companies but also the foreign stocks. The stocks aren’t listed on the exchange and are certainly considered very volatile stocks.

Day trading quickly became known as the investor’s way to gamble years ago. Now, with the growing popularity of the Pink Sheets, investors can really go double or nothing with stocks which are more than just a little risky to the investor who needs some excitement when they are building their investment portfolios.

What investors need to realize when choosing to jump on board with Cromwell Coulson, CEO of Pink Sheets LLC, is that not only are the stocks listed on the Pink Sheets listed there for a reason but there is a very real and legitimate reason that these stocks aren’t on the more notable exchanges. Either they couldn’t make it while on the big exchanges or they weren’t there to begin with.

As one might expect, Pink Sheet stocks offer investors, for the most part, mediocre financial information on the company. Further, bleak financials of the companies listed on the Pink Sheets are often camouflaged or extremely difficult to find.

What’s more, day traders who love to jump in and out of their chosen stocks and tend to love volatile stocks will be less likely to trade on the Pink Sheets with much success if they “play the market” on these stocks as they would the stocks on the NYSE, for example.

Day traders will find the pendulum swinging both ways on stocks found on the Pink Sheets. They’ll be drawn to them because huge profits can be earned. They will definitely need to do their homework and recognize the fact that if a stock is listed on the Pink Sheets—that fact alone shows a warning will be ever-present. And traders will be very aware of the fact that because of the difference in bid and ask prices of these over-the-counter stocks, dumping the stock on short notice may be a problem, if even possible.

Still, Coulson seems to have a growing over the counter business in these stocks which no one else wants. Companies such as Delta Air Lines and Volkswagen found their homes in the OTC neighborhood. And with Coulson’s determination to see more stocks on his sheets of pink, his stocks, no matter how volatile, may begin to be considered a pretty good gamble.

The post Pink Sheets – Investments Or Gambling On Sure Things? appeared first on ROI Credit Builders.

Top 5 Things You Didn’t Know About Small Business Credit

There is so much about small business credit that is misunderstood.  Many entrepreneurs do not even realize their company can have its own credit.  Those that do realize it, often have a very skewed idea about how it works. Because we are so familiar with personal credit, we tend to assume business credit works the … Continue reading Top 5 Things You Didn’t Know About Small Business Credit

Top 5 Things You Didn’t Know About Small Business Credit

There is so much about small business credit that is misunderstood.  Many entrepreneurs do not even realize their company can have its own credit.  Those that do realize it, often have a very skewed idea about how it works. Because we are so familiar with personal credit, we tend to assume business credit works the same way.  While some aspects of the two are similar, there are some very important differences that most entrepreneurs do not know. 

Everything You Don’t Know that You Don’t Know About Small Business Credit

Some of the most common misconceptions about business credit are related to how you get it.  Even more are about what affects business credit and where the information on the report comes from.  It is such uncharted territory that most do not even know what they don’t know.  

Once you understand all the differences between business credit and personal credit, you can begin the work of building a solid company foundation for your biz. 

5 Things You Didn’t Know About Small Business Credit

Here are a few of the most common misconceptions about business credit. 

You Have to Work for Small Business Credit

It doesn’t build on its own through the course of regular company financial transactions.  This is different than how personal credit builds. With personal credit, your payment information is simply reported to the personal credit reporting agencies (CRAs.)  With business credit, it isn’t so simple. 

It takes intentional effort from the way you set up your biz to the accounts you apply for first.  You have to go into it with the intention of building business credit. You have to work for it. 

Check out our best webinar with its trustworthy list of seven vendors to help you build business credit.

It’s About More than Payment History

Unless your company is set up with the intention of separating it from the owner, business transactions will report to the personal CRAs.  This means your corporate transactions and your personal transactions will be reporting on your personal credit. Everything will be all mixed up.

Not only that, but if you do not set things up properly, you could end up not having a business credit score at all!  Even if you have credit in your company name, if your firm is not properly set up as a fundable entity, those accounts will be on your personal credit report.  You may not even have a business credit report! 

Your Personal credit CAN affect it

Corporate Funding Credit Suite

By nature, the way a company must be set up to build business credit means that your company’s accounts will not affect your personal credit.  That is, if everything is set up properly. However, the reverse is not necessarily true. When lenders look at your credit, not only might they pull a personal credit report, but they can use other sources as well.  The information gleaned from those sources, even if not firm-related, can affect their decisions.  

You are probably asking yourself the question then, why even bother?  If your personal credit can still come into play, what’s the point? There are a few reasons biz credit is important. First, it protects your personal credit.  Like I said before, if your set up your company properly, your operational finances should not affect your personal credit score. This will ensure that if your biz suffers, your personal finances can still stay intact.

In addition, if personal issues are coming into play when you are trying to get company funding, strong business credit can help.  It can mitigate negative personal information lenders may consider in their decision making.

Finally, if you do not have business credit, you will have to fund your dream on your personal credit alone.  Personal limits are typically much lower than business credit limits. Conversely, company credit expenses tend to be much higher than personal expenses.  This means that even if you are paying off your expenses each month, you are likely to hover near your limits consistently. 

That will increase your debt-to-credit ratio, which will in turn lower your personal credit score.  So even if you do everything right, you could end up damaging your personal credit if you try to use it to fund your company. 

The Information Comes from Places You May Not Expect

Like I said, it’s not all just payment history.  There are so many other things the CRAs look at and can report on.  They gather information from a number of sources, and not all of them are lenders.  For example, the Small Business Finance Exchange, or SBFE, gathers information from a variety of places.  These include, among other things, public records. That means every lien, every parking ticket, and every bounced check has the potential to bite you.

You do NOT Have to Have Business Credit to GET It

This is perhaps the most difficult thing for some entrepreneurs to understand.  It can seem at the onset that you have to have business credit to get business credit.  An entrepreneur is often shocked when they try to apply for funding with biz credit and they are denied, because they pay their bills on time.  They cannot figure out what is going on. 

They then find out they actually do not have business credit. That is why they are continually denied when they apply for corporate credit cards.  Then they wonder how on earth they are supposed to get business credit if they are denied funding because they do not have company credit.  

Here is the thing.  Once you have your company set up properly as a separate, fundable entity, you need to start working with starter vendors.  These are vendors that will extend net terms on invoices without a credit check. Not only that, but they will also report your payments on these invoices to the CRAs.  This will be the beginning of your business credit score. You do not have to have business credit to get corporate credit, but you do have to start with starter vendors. 

Check out our best webinar with its trustworthy list of seven vendors to help you build business credit.

Now That You Know

Now that you know this information, you probably have a ton of questions.  Questions like: 

  • How do I make my company a fundable entity separate from myself? 
  • What’s the next step after starter vendors?
  • Where are lenders getting information about me? 
  • How do I know what is on my credit report? 

We can answer these questions and more.  The first step is already done. Now you know what you didn’t know before.  

How to Separate Your Company as a Fundable Entity

This part is easiest taken care of on the front end.  However, it’s never too late. If you are looking for funding, you likely already have an established biz.  You can take these steps now to begin building your corporation credit. 

How to Separate a Company from Its Owner to Build Small Business Credit

  • Establish a separate phone number and address for the biz. 
  • Formally incorporate as an LLC, S-corp, or Corporation.
  • Establish a separate company bank account.
  • Have a professional corporate website.
  • Have a separate corporation email address with the same URL as the website. 
  • Get and EIN and use it instead of your SSN to apply for business credit. 
  • Get a D-U-N-S number. 

A few things to remember when it comes to these things are that you can get a virtual physical firm address pretty easily.  Also, there are several ways to get a corporate phone number online that will simply forward to the phone number you already use.  This means there is no need to get a separate phone. 

Also, do not use a free hosting service.  You need to pay for hosting. The same goes for email service.  A free service such as Hotmail, Yahoo, or even Gmail will not work in this situation.  

As for a D-U-N-S number, be careful.  You really do need it because you cannot have a credit file with Dun & Bradstreet without it.  Since they are the largest and most commonly used biz credit reporting agency, having a D-U-N-S number is a must.  However, when you go to their website to get one, they will try to upsell you. The number is free, and you do not need anything else.  Stay strong.

How to Use Starter Vendors to Build a Small Business Credit Score

Now, you know how to set up your company and you know you need to start with starter vendors, but where do you go from there?  The business credit building process works in tiers. You start with the vendor credit tier, which is where the starter vendors are.  Then, once you have 8 or 10 of those vendors reporting your positive payment history, you can move on to the retail tier.

The retail credit tier is where you find credit cards that can only be used at the retail stores that issue them.  For example, an Office Depot credit card would be in this tier. After you have enough of these types of cards reporting your payment history to the CRAs, you can move on.  Your small business credit should then be strong enough to apply for cards in the fleet tier.

The fleet credit tier is where you find the cards that you use specifically for fuel and auto repair and maintenance costs.  These are cards from companies such as Shell and Fuelman. After you snag enough of these and have them reporting positive payment history, you can apply for cards in the top tier. 

That is the cash credit tier.  These are the cards that have higher limits, lower rates, and no exclusions on where you can use them or what you can use them for. If you use these cards responsibly, you will have access to all the funding you need to run and grow your business. 

Small Business Credit and Company Loans

As you may have noticed, we didn’t mention biz loans much when talking about small business credit.  That is because most traditional lenders are going to check your personal credit history even if you do have strong corporate credit.  There is just no way around it. However, if you have strong company credit, it can only help you. It may mean the difference in approval for a $50,000 loan or a $100,000 loan, or 10% interest and 6% interest. 

In addition, some non-traditional lenders will actually look at business credit and even report to the business CRAs such as Dun & Bradstreet, Experian, and Equifax.  

Check out our best webinar with its trustworthy list of seven vendors to help you build business credit.

Monitor Your Credit

This is important all the way through the process.  First, you need to know which accounts are reporting to your small business credit.  You also need to know how many. That’s how you will know it is time to start applying for cards in the next tier. 

The problem is, you cannot get a free copy of your business credit report the same way you can with personal credit.  You can purchase a copy of your report from the reporting agencies, but you have to pay each time you want to see what is on your report.  At CreditSuite.com/monitoring, we can help you monitor your business credit on an ongoing basis for a fraction of the price.  Not only will this help you to know when to move on to the next tier, but it will let you see if there are any mistakes or inaccuracies keeping your score from being the best it can be.  If there is something there that shouldn’t be, or something not there that should be, you can get it corrected quickly.  

Everything You Need to Know About Small Business Credit and Then Some

Now that you understand more about small business credit, what it is, and why you need it, you are likely to have more questions than just what we’ve covered.  Here is one thing you can know without a doubt however. Strong small business credit it vital to running a healthy company. Our free guides, webinars, and dedicated staff are here to help you build and maintain small business credit every step of the way.  Your business success and growth depend on it.   

 

The post Top 5 Things You Didn’t Know About Small Business Credit appeared first on Credit Suite.

This Thanksgiving Day, Turn Things Around by Learning How to Build Good Business Credit

Many business owners don’t realize that there is even a question of how to build good business credit?  They think that business credit works similar to personal credit. Since business personal credit builds passively by simply with handling credit wisely, they think business credit does the same.  That isn’t the case however. The answer to “How to build good business credit?”can be summed up in one word, intentionally. You must make it a point to build business credit. You have to make it happen. 

How to Build Good Business Credit: Fill Your Cornucopia with Business Accounts

In traditional Thanksgiving Day pictures, you see the ever overflowing horn of plenty known as the cornucopia.  There are breads, fruits, vegetables and nuts pouring out of the horn shaped basket. If you are a business owner, you need two cornucopias.  One is for your business credit, and one is for your personal credit. While you want them both overflowing with healthy accounts, what happens with many is that the business credit one is empty or non-existent.  They think it is there and full, while in reality all the accounts they think are hitting their business credit report are actually hitting their personal report. 

Why Do you Need Two Cornucopias? Does Business Credit Even Matter? 

If you’re wondering why it is important to know how to build good business credit, here is your answer.  The business credit cornucopia can hold more. Let me explain. If you try to run a business with only what is in your personal credit cornucopia, you will not have enough. You will need more than what it can hold. 

Check out our best webinar with its trustworthy list of seven vendors to help you build business credit.

Here is what that looks like in real life.  Your personal credit cards are going to have lower limits than what business credit cards have.  Business expenses are, by nature, a lot higher than personal expenses. Therefore, if you try to put business and personal expenses on the same credit cards, you are going to overrun your limits.  

Even if you make your payments on time, or even pay off your balances each month, you are likely going to keep hovering near your limits.  Not only does this reduce the funding you have available, but it can also have a negative impact on your personal credit score. Here’s how.  The closer your balances are to your limit, the higher your debt-to-credit ratio is. A high debt-to-credit ratio has a negative impact on your credit score. 

So, this means you need to ask how to build good business credit for two reasons.  First, you may not have enough credit availability to run your business successfully without it.  Second, if you do not build business credit, you could end up ruining your personal credit. Consequently, not only would your business success be in question, but you could lose the ability to do things like buy a house or a car. 

Where Does that Second Cornucopia Come From?

Here is what most business owners do not understand.  You have to intentionally go out and get that separate business cornucopia.  If you don’t, then any business accounts you open will just go straight to your personal credit cornucopia and wreak the havoc mentioned above. So, how do you do that?  How do you establish business credit in the first place so that business accounts report to that, and not to your personal credit? The key is to make your business appear to lenders as a fundable entity, separate from yourself as the owner. 

how to build good business credit Credit Suite

How to Build Good Business Credit: Establishing Fundability

The first thing you need to know is, it is easiest to do this as you are establishing your business.  If you are a new business owner just getting started, then set your business up this way on the front end so that you can begin building business credit now. If, however, you are already up and running, it isn’t too late.  You may have to do some backtracking, but it will be so worth it. Either way, this is what has to be done. This is the first part of the answer to the question of how to build business credit. 

Separate Name and Contact Information

This is an essential first step to weaving a separate business credit cornucopia.  Of course, most businesses do not have the exact same name as their owners. The key is, you have to list the business in the business directories under that business name.  In addition, it needs to be listed with its own address and phone number. 

A question often asked about this is, how do you get a separate business phone number and address if you run your business out of your home or online.  Actually, there are several options now for a business telephone number that do not even require you to have a second phone. You can just have your business number forwarded to your personal line. 

As for an address, there are a number of virtual office companies that offer a physical mailing address to businesses for just this purpose.  Typically, they also offer a number of other useful services such as meeting spaces and live receptionist services. 

Get and EIN

When you apply for credit, they always ask for you Social Security Number, or SSN.  If you are applying for credit in your business name, you shouldn’t use your SSN. If you do, that account will automatically relate to your personal credit.  The way around this is to get your business an EIN.  They are free on the IRS website.  You may still need to use your SSN for identification purposes when applying for credit under new fraud regulations, but that needs to be the only reason you use it. 

You Must Incorporate

This isn’t an option.  While it is much easier and cheaper to operate as a sole proprietorship or partnership, you cannot get the separation needed if you do not formally incorporate.  Whether you choose an S-corp, LLC, or corporations will depend on your other needs and budget. Any of them will work for establishing fundability. Still, you must choose one. 

Get a Business Bank Account

When building fundability, you need to have a separate business bank account.  This serves a number of purposes. First, separate from building fundability, this helps you keep your business and personal expenses separate.  That will be a tremendous help come tax time. 

Secondly, some business credit cards want to see a business bank account with a minimum average balance before they will approve credit.  Lastly, it helps lend credibility to the fact that your business is a fundable entity on its own, apart from the owner.

Professional Website and Dedicated Email 

In today’s business world, if you do not have an online presence you do not exist.  Having a poorly executed online presence is just as bad. You need a professionally built, working website.  Pay for design and hosting. The free services are not going to be good enough to help you out here. In addition, you need a dedicated business email address with the same URL as your website.  Free email platforms such as Yahoo and Gmail do not look professional.

Check out our best webinar with its trustworthy list of seven vendors to help you build business credit.

Get a D-U-N-S Number

There are several business credit reporting agencies, or CRAs.  The 3 most commonly used are Dun & Bradstreet, Experian, and Equifax.  Of those three, Dun & Bradstreet is definitely the largest and most commonly used.  Before you can have a credit profile with them, you must have a D-U-N-S number.  This is how they identify your business.  

If you do not have a D-U-N-S number, you will not have a credit profile with Dun & Bradstreet, so you definitely need the number.  That’s all you need though. They will try to upsell you on other services, but stay strong and resist. You just need the number, and it’s free. 

How to Build Good Business Credit: Fill the Cornucopia

Once you have your separate business credit cornucopia, it’s time to fill it with lots of yummy accounts to build your business credit big and strong.  That, again, takes intentionality. You cannot just go out and start applying for credit in your business name. It won’t happen. Just as those that celebrated the first Thanksgiving Day had to actively work to provide the food for the feast, so you will have to actively build business credit. To do this, you have to work through the business credit tiers.  

Starting at the bottom tier, you build enough accounts and business credit to move up to the next tier, until you reach the top.  Here is a little more about each tier and what it takes to move on to the next. 

How to Build Good Business Credit Using The Vendor Credit Tier

This is the first tier on your journey to fill your business credit report with accounts.  It consists of starter vendors. These are vendors that will offer your business net terms on invoices without first checking your credit.  Then, when you pay, they will report those payments to the CRAs. This is the second part of the answer to how to build good business credit.  In this way, you can begin to build credit without having credit. 

They will look at other information however.  Some like to see a certain amount of time in business.  Some will want you to place an initial order, or more than one, before they will extend net terms.  Others will want to see a business bank account with a minimum balance. Another thing they sometimes look at is a listing in the business directories.  Starter vendors may require any combinations of these things. Find out more about some of the most common starter vendors here. 

How to Build Good Business Credit With The Retail Credit Tier

After you have 8 or 10 accounts from the vendor credit tier reporting positive payment information to the CRAs, you can apply for credit in the retail credit tier.  These are those cards that you can only use at the specific retail store that issues them. For example, Office Depot cards that you can only use at office depot are in this tier.. 

How to Build Good Business Credit: Continuing to The Fleet Credit Tier

After you have enough accounts reporting from the retail credit tier, you can apply for cards in the fleet credit tier.  These are cards that you can only use for fuel costs and automobile repair and maintenance. Fuelman and Shell are examples of companies that issue cards in this tier. 

How to Build Good Business Credit: Finishing with The Cash Credit Tier

This is the top credit tier.  It’s the goal. Once you have enough accounts reporting from the fleet credit tier you can apply for cards in this tier.  It consists of the standard Mastercard, Visa, Discover, and American Express cards that are not limited to a specific store or type of expense.  

How to Build Good Business Credit: Don’t Let Things Start Falling Out

Even though the overflowing cornucopia makes for a pretty Thanksgiving Day picture, you don’t really want the same effect with your business credit.  If you do not handle the credit you have properly, you’ll start losing control. Be sure to pay accounts on-time. Remember, don’t buy things you cannot afford just to build business credit.  You will end up with the opposite of what you want. Also, be sure you keep an eye on things. You wouldn’t want a bug eating up all that good food in your horn of plenty right? 

Monitor your business credit regularly to ensure there are no mistakes and that everything is up to date.  We can help you with that here.

Check out our best webinar with its trustworthy list of seven vendors to help you build business credit.

How to Build Good Business Credit: May Your Cornucopia Be Full

I think it’s clear at this point.  It takes more than just paying your bills on time to build business credit.  Unlike your personal credit score, your business credit score does not appear passively.  You have to work to intentionally build it. It isn’t a hard process, but it is a process. You have to trust the process and act responsibly.  Now that you know how to build good business credit, it’s time to get started.

 

The post This Thanksgiving Day, Turn Things Around by Learning How to Build Good Business Credit appeared first on Credit Suite.

This Thanksgiving Day, Turn Things Around by Learning How to Build Good Business Credit

Many business owners don’t realize that there is even a question of how to build good business credit?  They think that business credit works similar to personal credit. Since business personal credit builds passively by simply with handling credit wisely, they think business credit does the same.  That isn’t the case however. The answer to … Continue reading This Thanksgiving Day, Turn Things Around by Learning How to Build Good Business Credit

5 Things You MUST Know about Business Tradelines

Business tradelines are the accounts on your business credit report.  We are going to tell you everything you need to know about why you need them, how to get them, and how to use them to build strong business credit. And How to Get Them Without Already Having Business Credit Business tradelines, and terms like … Continue reading 5 Things You MUST Know about Business Tradelines

5 Things You MUST Know about Business Tradelines

Business tradelines are the accounts on your business credit report.  We are going to tell you everything you need to know about why you need them, how to get them, and how to use them to build strong business credit.

And How to Get Them Without Already Having Business Credit

Business tradelines, and terms like it,  are thrown around in the business world with the assumption that everyone knows what they mean.  However, these assumptions can cause problems when they are wrong. Then you run into issues with people using terms in ways they are not meant to be, to mean things they do not really mean.  As you can imagine, it can cause a lot of confusion. 

Our goal is to clear up that confusion.  We intend to lay out for you exactly what tradelines are, why you needed them, and what you don’t know about them that you definitely need to know.  

Check out our best webinar with its trustworthy list of seven vendors to help you build business credit.

What Are Business Tradelines?

The term in question, business tradelines, simply refers to accounts that report your payments to the business credit reporting agencies, or CRAs.  That could be vendor accounts, business credit cards, or a select few other things. Most often the term refers to vendor accounts. 

You buy stuff from these vendors, and they allow you to pay them at a later date. We call this net terms.  It is different than revolving credit, because you have to pay the whole balance by a certain date.  

That means they will bill you for the goods or services you buy from them, with the understanding you will pay within a certain amount of time.  Most often, it is 30 days, or net 30 terms. Occasionally they will extend net 60 or net 90 terms. 

If you know anything about tradelines, that is likely the extent of it.  Now, here is what you don’t know.  

5 Things You MUST Know About Business Tradelines That You Probably Don’t Know Already

This is the information that can get confused from source to source.  We’re going to clear it up for you. 

  1. Not all Business Tradelines are Good for Building Business Credit

Tradelines are only good for building business credit if they report your payments to the business credit reporting agencies, or CRAs.  These include Dun & Bradstreet, Experian, and Equifax. There are a few others as well, but these are the big three.  

The thing is, not all of them do report payments.  They are not required to do so, and many do not. You have to find those vendors that will report your payments if you are going to use them to build business credit. 

  1. Buying Business Tradelines is a Bad Idea

Since it can seem almost impossible get business tradelines without credit, someone somewhere at sometime had the idea to create companies, use them to obtain tradelines, then sell the tradelines to those who wanted fast business credit. 

Essentially, these are shelf companies that have years’ worth of seasoned tradelines.  They market to new business owners as a way to access funding they would not otherwise qualify for. It sounds great.  You pay a lot, but you get the potential access to so much more. 

The truth is however, that lenders are not dumb.  They caught on to this ruse quickly, and though it is not technically illegal, it is very much frowned upon.  If a lender catches wind of the idea that you may be using business credit that you did not actually build yourself, you could be blackballed.  That means, not only would you not be able to get funding based on the credit you purchased, but it would block you every time you try to build credit on your own. 

  1. You Can Get Business Tradelines without Already Having Business Credit

Business Tradelines Credit Suite

This is the little-known secret to building business credit that you have been looking for.  If you start with vendors in the vendor credit tier, known as starter vendors, you can get tradelines without having business credit at all.  When they start reporting the CRAs, your credit will start to grow on its own without you having to spend a dime other than what you buy from the tradeline vendors that your business needs anyway. 

Once you have enough business tradelines reporting from these starter vendors, your credit should be strong enough to start applying for credit cards in the other credit tiers.  As you gather more accounts in each tier, you will be able to move on to the next tier. 

2. You Need to Get Business Trade Lines in a Specific Order

I touched on this above.  If you are using business tradelines to build business credit, you can’t just start applying for business credit cards right away.  They will deny you every single time. You have to start with establishing tradelines with those starter vendors in the vendor credit tier. 

3. Too Many or Too Few Tradelines Reporting Can Affect Your Business Credit Score

The problem with this is, the CRAs are pretty tight lipped on where the sweet spot is.  That said, your best bet is to open only as many accounts in each tier as you need to move on to the next.  Then, only close accounts if you absolutely must.  

One thing we do know is that Dun & Bradstreet requires at least three tradelines reporting before it will even calculate a Paydex, which is the score lenders most commonly use.  It is the most like the personal FICO score.

3 Tips to Establishing Initial Business Tradelines Without Established Business Credit

Along with the Vendor credit tier, which I will talk more about below, there are a couple of other options for getting initial business tradelines reporting your payments. 

Check out our best webinar with its trustworthy list of seven vendors to help you build business credit.

Ask Bills to Report

You pay things like utilities, rent, telephone, and internet each month already.  These companies do not have to report to the CRAs, but some will. You’ll have to ask, but the worst they can say is no.

Work with Current Vendor Relationships

If you have been in business long enough to have vendors that you already have a good relationship with, use that to your advantage.  Open a discussion about net terms on invoices and see what they will offer. You may be able to get some tradelines reporting without a credit check that way, and build to the next tier faster. 

The Vendor Credit Tier

In addition to these options, the vendor credit tier is the best place to get started when it comes to building business credit.  Many of the vendors in this tier will extend net terms and report payments, without doing a credit check. Instead, they will rely on length of time in business and income to determine eligibility. 

Now you are probably asking yourself, who are these vendors.  There are several, but some of the easiest to get started with include: 

Quill

Quill sells office equipment, packaging, and cleaning supplies. They report to D&B and Experian.  Because they report to two separate credit reporting agencies, you get two credit experiences with them. Place an initial order first unless you already have a D&B score.  Then, if you order items every month for 3 months, they will typically approve you for a Net 30 account.

When you check out you will see the option to buy now and pay later.   Use your business information to fill out the form. Don’t worry about it when they ask how long you have been in business. Because even new business owners often report approval.  It can take a couple of hours to get approval. It may even take a couple of days if you apply on the weekend.

Uline

Uline sells shipping, packing, and industrial supplies, and they report to D&B.  You must have a D-U-N-S number. They ask for 2 references and a bank reference. The first few orders may need to be prepaid to first get approval for Net 30 terms.

When you check out you will see the option for them to send you a bill.  If you choose this option and check out successfully, you know you got approval. 

Grainger

Grainger Industrial Supply sells safety equipment, plumbing supplies, and more.  They report to D&B, and they require a business license, EIN, and a D-U-N-S number.  If you have these things, you may get approval for a $1,000 line of credit.

What are The Other Credit Tiers? 

If you are new to the idea of business credit, this is likely a question you are asking yourself as you read this.  I keep talking about the other credit tiers, but what are they? The tiers work similar to stair steps, with the vendor credit tier being the bottom step.  You cannot move up to the next step until you have enough vendor credit tier accounts reporting. 

Once this happens, you can move up to the retail credit tier.  These are cards that you can only use at the specific stores that issue them.  For example, a Staples Card or a Best Buy Card would be in this tier. When you have enough of these types of accounts reporting, you can apply for cards in the fleet credit tier.  These are cards from companies like Shell and Fuelman that are exclusively for costs related to fuel and auto maintenance and repair. 

After you gain enough accounts in each of these tiers you can apply for cards in the top tier, the cash credit tier.  These are the standard cards with lower interest rates, higher limits, and no limitations on where you can use them or what you can use them to purchase. 

Be Sure Business Tradeline are Reporting to Your Business Credit

It isn’t a given that these tradelines will report to your business credit.  You have to have to business set up properly for that to happen. What does that mean?  It means setting up your business as a separate entity from yourself as the owner. 

The first step in this process is to make sure your business has its own contact information. Your phone number and address are identifying factors on your personal credit. So, if your business shares the same information, things are not going to get confused and mixed up. 

Other Ways to Set Up Your Business Separately from Yourself

  • Get an EIN. This is an identifying number for your business similar to your SSN.  So use it instead of your SSN when applying for business credit. 
  • Formally incorporate your business.  A corporation, s-corp, or LLC will do serve the purpose, so choose based on your budget and liability protection needs. 
  • Open a separate business bank account.  This will not only serve to help separate your business from yourself, but it will come in handy at tax time as well. 
  • Set up a professional business website.  Pay for hosting. A free service won’t work.  Also, get a business email address with the same URL as the website.  Stay away from free services such as Yahoo and Gmail. 
  • Get a D-U-N-S number.  You cannot have a credit profile with Dun & Bradstreet without one, and since they are the largest and most commonly used business CRA, you need a profile with them.

If you set up your business in this way, and apply for credit using the business information and not your own, your tradelines should report to business credit and not personal credit. If you are already up and running and haven’t done these things, it’s not too late.  Get started now. 

Check out our best webinar with its trustworthy list of seven vendors to help you build business credit.

Going Forward: Business Credit Monitoring

After you have business trade lines reporting to the business CRAs, be sure you keep an eye on your reports.  So, they will likely not show the name of the companies reporting, only the types of companies. That means you need to keep track of your accounts and match them up so you know who is reporting what.  You will also want to watch for any mistakes and get them corrected. We can help you monitor your business credit on a regular basis here. 

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