Protected: Start building business credit (bonus yt)

If you’ve made it this far, you are REALLY serious about building your business credit.  Please note that everyone starts at the bottom when it comes to business credit.  The process is very similar to when you were 18 years old and had to build your personal credit.  You likely started with a store or merchandise card as your first trade line.  Business credit is no different.  You have to start with vendors that will take a chance on your company even though it doesn’t have any established credit.

These companies are known to grant credit to newer businesses, however, because you are new in business some of them may want you to prepay. Whenever possible, try and pay with net terms. If they want you to prepay, then call them directly and ask to set up a net account. Many of them will say once you prepay on your first order then you can have net terms, that is acceptable.

Please use each account and make the payments on time, each company report on different schedules to the business credit bureaus. Some report monthly and some quarterly, remember, you will need a total of 5 trade account reporting to generate your Paydex score.

It is not mandatory to use each account (though it is recommended), keep in mind, if you do not use the account, it will not report to the business credit bureaus, and will not be considered a trade line.

If you receive a decline from a couple accounts do not worry, you will be applying for enough accounts that some will be approved and some declined, those that are declined can be reapplied for once you have more business history. The important part is to use the accounts that you have been approved for, wait for them to report and then move on to the next level.

A few important points to remember after your trade credit accounts are set up:

• It is recommended that you spend $80 or more per account (shipping not included)
• Once you receive the invoice, make the payment right away. Do not overpay!