By Credit X

Building
Business
Credit
 DISCLAIMER
COPYRIGHT 2022 @ CREDIT X. ALL RIGHTS
RESERVED. THIS BOOK OR ANY PORTION
THEREOF MAY NOT BE REPRODUCED OR
USED IN ANY MANNER WHATSOEVER
WITHOUT THE EXPRESS WRITTEN
PERMISSION OF THE PUBLISHER EXCEPT
FOR THE USE OF BRIEF QUOTATIONS IN A
BOOK REVIEW. THIS BOOK CAN BE PRINTED
OUT FOR YOUR PERSONAL USE. WE ARE
NOT LAWYERS, ACCOUNTANTS OR
FINANCIAL ADVISERS. SEEK INDEPENDENT
PROFESSIONAL HELP FOR THOSE
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SERVICES.
 Introduction
Business credit is credit obtained in the name of a
company. This credit is based on the company's ability to
pay, not the owners'. When it comes to building a strong
business credit profile, payment history is the ONLY thing
that matters. Business credit scores are solely determined
by whether or not the company pays its bills on time. There
are three major business credit reporting agencies...
Experian, Dun & Bradstreet, and Equifax.

Most people fail to build business credit because they

lack the knowledge and know-how to do so. Many people
apply for business credit in the incorrect order and are
denied.

A credit profile for a business that is completely

separate from the business owner's personal credit profile
can be generated. In fact, the only way business credit can
hinder your personal credit is if you completely default on a
loan, credit card, or line of credit issued to the business.
Late payments and credit usage on any type of business
funding DO NOT and WILL NOT have a negative impact on
your personal credit profile.

When done correctly, business credit can be built

without a hard personal credit check in some cases.
Through Non-PG (Personal Guarantor) lenders, business
credit can be obtained quickly regardless of personal credit
quality. However still, the owner is not personally liable. This
means that the business owner's personal assets cannot be
pursued in the event of a default.

Building business credit takes time. You are not born

with perfect credit. You nurture and construct it. As your
company continues to use credit and pay bills on time, it will
be eligible for more credit.

3 NOW FOR THE FUN PART……….

 Table Of Contents
1 Setting Up Your Business Entity

2 How To Obtain Your EIN #

3 Setting Up Search Engine Optimization

4 Opening Up A Business Bank Account

5 Applying For Dun & Bradstreet

6 Utilizing Credit Monitoring Account

7 Obtaining Tier 1 Vendor Accounts

8 Obtaining Tier 2 Vendor Accounts

9 Obtaining Tier 3 Credit Accounts

? FAQs
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 Step 1 - Setting Up Your Business Entity
To begin establishing business credit, a corporate entity is required. Therefore, you must register either an LLC
or a S/C corporation. These entities are NOT directly associated with you in the same way that a sole
proprietorship is.

• Choose a name
‣ It is crucial not to include the nature of your corporation in the business name when choosing a name. Avoid
using terms such as Real Estate, Investments, and Logistics in your company's name. Most lenders view
them as risky, and you may be denied nancing as a result. DO NOT include your personal name in the
name of your business. You want to keep your personal and business entities as separate as possible.

• Choosing a Business Address/Location

‣ If possible, avoid using your home address. Your business address is part of the public record and is easily
accessible; therefore, you should utilize a more secure location. If you do not have a physical storefront or
of ce, you can register your business with virtual of ce providers such as regus.com and
opusvirtualof ces.com. When selecting a virtual of ce, Google the address they provide to ensure that it is
not associated with too many corporations. Lenders do not like this.

• Find the Secretary of State website for the state in which you wish to register your business.
‣ Type "how to register an LLC/S Corp in (YOUR STATE)" into Google. Be sure to scroll through the
advertisements and click on the link for your of cial state's website. Typically, the right link will conclude with.
Gov. In the majority of states, registration can be completed online, while in others, forms must be
downloaded, printed, and mailed in.

• Find out your North American Industry Classi cation System Code (NAICS Code)
‣ A NAICS code categorizes your business within a category that is speci c to its nature. Each and every
business in North America has a unique NAICS code. To learn more about NAICS codes, go visit naics.com.

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 Step 2 - How To Obtain Your EIN#
Whether you have employees or not, you must have a Federal Tax ID/EIN for your business entity. The
Employer Identi cation Number is required to open a business bank account, establish a business credit pro le,
and apply for credit. Similar to how you have a Social Security Number, your company has an EIN/Tax ID. This
number is what legally differentiates you from the business. You must ensure that you use the same EIN for all
creditors and suppliers. Additionally, your EIN will be used for tax purposes.

NOTE
YOUR EIN/TAX ID NUMBER IS FREE!
I REPEAT! FREE!

• Where to get your EIN/TAX ID?

‣ You can retrieve your EIN for FREE immediately from the irs.gov website. Therefore, if you Google "how
to obtain an EIN," do not click on or utilize any website that requests cash. Answering a few easy
questions about your business is all that is required when applying on irs.gov; submit your application,
and you will obtain your EIN number within minutes. Please keep your EIN in a secure location.

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 Step 3 - Search Engine Optimization
• Phone Number/Fax
‣ Take the time to register your company with the 411 database. Listyourself.net is a wonderful website to
help get your business listing into 411 directory. You must have a dedicated business phone number that is
listed under the business name in the 411 directory. A toll-free number will lend legitimacy to your company,
but a local business number is required for inclusion in the 411 directory. Lenders, suppliers, creditors, and
insurers will con rm that your company is listed with 411. Ringcentral.com is a company that provides
business owners with 1800 (toll-free) numbers and fax numbers. Even if you are the only proprietor of a
home-based company, a toll-free number gives the impression of a much larger enterprise. Your toll-free
number can be forwarded to any cell or landline phone.

• Website
‣ Creditors prefer to research your business online. It would be ideal if customers learned everything from your
company's website. Sometimes, the absence of a website can hinder your prospects of acquiring business
funding. There are numerous online resources that offer reasonably priced business websites, allowing you
to establish an online presence with a summary of your company's services or goods and contact
information. Wix.com is an example of a cheap, user-friendly website-building platform.

• Email
‣ Obtaining a company email address for your business is ESSENTIAL. Avoid free email providers such as
Yahoo and AOL. An example of what NOT to use is partybusrental2022@gmail.com. @yourcompany.com
should be used as the email address. An excellent example would be info@partybusrental.com. Not only is it
professional, but it also increases your chances of receiving approval from a lender or creditor. Setting up a
business email account is too simple and affordable to disregard. Most website construction platforms
include this feature as part of their set up. There may be an extra cost. Google also offers business email
addresses with your company's name as the @ symbol. The subscriptions begin at $6 each. Register at
workspace.google.com/pricing.
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 Step 4 - Open A Business Bank Account
Credit unions and local banks are the greatest options for opening a business account. One of the reasons for
this is that when and if there is a signi cant nancial or economic crisis, "Big Banks" are struck the hardest,
resulting in the non - availability of prospective investment that could assist rms in weathering the storm.
Community banks and credit unions are also superior to commercial banks at working with start-ups and small
businesses. They deliver quality incentives, such as increased credit card limits, simpler funding, and prizes.

Your business banking history is crucial to your ability to obtain business loans in the future. When seeking
nance, it is essential to establish a trustworthy banking connection with the nancial institution you select. Some
creditors view the date you opened your bank account as the day your company began.

You should utilize your company bank account to pay all business-related expenses (telephone bill, utilities,
rent/lease, insurance, vendor accounts, etc.). Ensure that you open the bank account under the precise name
under which the business was registered and not your own name.

Key Points Recommended Banks

Try to keep at least 10k in your account • Navy Federal Credit Union
• DCU
Bank with Credit Union preferably
• America First Credit Union
Stay Away from “Commercial Banks” • First Tech Credit Union
EIN, Articles of Incorporation, and an
• Local Credit Union in your area
operating agreement are required for • Local Banks in your area
business account opening.
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 Step 5 - Applying For Dun&Bradstreet
If you already have a DUNS number for your business then skip this step…
Not sure if you have a DUNS number?…Call 866-705-5711. Give them your business name and they can
check for you or visit their website at https://www.dnb.com/duns-number/lookup.html

The Data Universal Numbering System (DUNS) number is a unique identifying number consisting of nine digits
that is assigned by Dun & Bradstreet. It is used to construct a Dun & Bradstreet credit le, which is frequently used
by lenders to anticipate the dependability and stability of your business. You CANNOT use your DUNS number to
apply for credit of any type. The process of acquiring a DNB number takes between 5 and 10 minutes. It can be
requested online at https://www.dnb.com/duns-number/get-a-duns.html or by calling the number listed above.
You are required to give the following details:

1. Legal business name

2. Physical address for your organization
3. Doing business as (DBA) or other name by which your organization operates
4. Mailing address… if separate from physical
5. Telephone Number
6. Contact Name ad Title
7. Number of Employees at your physical location
8. Year the business was established
9. Primary type of business

The DUNS number is free of charge. Be wary of companies that charge for this service. Include a valid phone
number on the application, as a representative will contact you within seven days to con rm your application. DO
NOT reject this call. In the event that you miss this call, please contact their customer service.

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 Step 6 - Setup Credit Monitoring Account
Experian, Dun & Bradstreet, and Equifax all provide business credit reports. You must rst obtain a copy of
your business's credit reports to determine what information is being reported. Similar to a personal credit score, a
business credit score evaluates a number of the same factors. When evaluating a company's credit report,
payment history and debt utilization are both taken into account. There are two primary types of business credit
scores. Experian scores range from 1 to 100, with 100 representing an optimum score. Dun & Bradstreet uses a
PAYDEX score. When calculating scores, different business credit scoring models give different weight to various
factors. Anticipate that your payment history, account age, and debt level will be evaluated. Ensure that you
maintain a consistent nancial pattern with any lender or vendor with whom you have an account. Pay your bills
punctually!

NAV.com is by far the most popular website for monitoring business credit. Joining is completely free. They
monitor all three credit reporting agencies on a single platform, as well as your personal credit if you so choose.
With trade-in reporting, the 3rd and 4th Tier subscriptions help you build business credit. If you can afford $39.99
per month, I recommend Tier 3 or Tier 4 subscriptions. Nav will report your monthly payments to credit bureaus so
long as your subscription is active. This will appear on each company's credit report as a vendor trade line.

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 Step 7 - Vendor Accounts/Tier 1 Credit
Similar to a consumer credit report, a business credit report can begin with small credit amounts. In the world
of business credit, these small credit accounts are known as vendor credit accounts. Small credit accounts may be
granted to the business to assist them in establishing an initial credit pro le. A vendor line of credit is a line of credit
extended to your business on "Net15, 30, 60 or 90" day terms. Hence the Net 30 account name. This means that
you can purchase goods/services from these vendors up to a predetermined maximum amount and have 15, 30,
60, or 90 days to pay the bill in full. For example, if your business is set up with a Net 30 term account and you
purchase $100 of their goods or services, you must pay them back within 30 days. Remember that you are NOT
required to wait the full 30 days to pay off this invoice. The faster the balance is paid off, the quicker it will be
reported to your business credit pro le. Some vendors will grant your business Net 30 payment terms with as little
as an EIN number and 411 listing for veri cation. Always apply before providing your SSN. Some vendors may
require it, but I recommend beginning with those who do not. Here is a list of frequently utilized suppliers:

• uline.com - 1-800-295-5510
• https://www.quill.com/content/index/quill-net-30/ - 1-800-789-1162
• grainger.com - 1-800-472-4643
• https://shirtsy.com/net-30-application/ - 1-888-830-4121
• theceocreative.com/net30 - 1-754-755-0445
• https://crownof cesupplies.com/net30-application/ 1-307-317-7018

If your le is not already active, the DUNS system will automatically activate it when your rst Net 30 account
reports your "Trade line" to D&B. You should submit an application for at least ve Net 30 accounts. Before they will
approve your business for terms, some vendors require an initial prepayment. Your Net 30 accounts must be paid
in full and on time. Allow time for the vendors' reporting cycles to be incorporated into the reporting systems. It
typically takes three Net account reporting cycles (or 90 days) to build credit scores.

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 Step 8 - Vendor Accounts/Tier 2 Credit
Whether you have personal or business credit, you must adhere to a speci c account progression. Typically,
you begin with the easiest-to-obtain accounts and work your way up to the accounts with the most stringent terms
and the best rewards and incentives. When establishing business credit, Tier 2 suppliers represent the second rung
on the ladder of progression. Once you've established multiple trade lines using Tier 1 Net 30 accounts, you can
typically obtain Tier 2 vendor accounts. Here is a list of Tier 2 vendors that we've hand-selected:

• Of ce Depot & Of ceMax - https://business.of cedepot.com

‣ Reports to D&B
‣ Business must be at least 2 years old
‣ Must be well-established with multiple Tier 1 vendor accounts
• CreditStrong Business - https://www.creditstrong.com/business
‣ Reports to D&B, Equifax & Experian
‣ Business must be at least 3 months old
• Home Depot - https://www.homedepot.com/c/Credit_Center
‣ Reports to D&B, Equifax Business, Experian Business
‣ Must be well-established with multiple Tier 1 vendor accounts
‣ Reasonable Payment history for at least 90 days
• BP Fuel Credit Card - https://www.bpbusinesssolutions.com/business-solutions-card-details/
‣ Reports to D&B
‣ Must be somewhat-established with Tier 1 vendor accounts
‣ Reasonable Payment history for at least 90 days

Tier 2 accounts are also known as trade credit in advance. Tier 2 accounts are more dif cult to obtain than tier
1 accounts. Occasionally, a soft credit check and a personal guarantor may be required (PG).

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 Step 9 - Tier 3 Credit Accounts
Tier 3 suppliers are a conduit to more strong business credit portfolios. If you have no Tier 1 or Tier 2 vendor
accounts, you are NOT prepared to apply for Tier 3 vendor accounts. Tier 3 accounts are lending accounts for
banks. Typically, a bank that offers unsecured business credit lines. You must construct a diverse business credit
portfolio. This includes vendors beyond Tiers 1 and 2. Tier 3 suppliers are required to have a longer business
history and a more established business credit score. Typically, they prefer to see consistent business revenue
before extending credit. Some even offer credit similar to that of credit cards. Prior to Tier 3, you should have at
least 9 to 12 combined Tier 2 and Tier 3 trade accounts reporting. Some Tier 3 accounts require a soft credit
inquiry and/or a personal guarantor.

NON PG PG
• Ramp - www.ramp.com/start • Ink Business Preferred

• Divvy - www.getdivvy.com • Capital On Tap

• Brex Card - https://www.brex.com/signup • Amex Plum

• Sams Club - Apply in your nearest location

• Amex Business Plus
• SVB Innovators - https://www.svb.com/connect
• Amex Business Gold
• Stripe Card - https://stripe.com/corporate-card
• Capital One Spark

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 FAQs
How long does building business credit take?
- In some cases 60-90 days.

Does my business have to be open for 2yrs or more to obtain funding?

- For business credit cards, the majority of lenders DO NOT require a 2-year business existence.
Unfortunately, for the majority of business loans and no-document lines of credit, your company
must have been operating for at least two years.

Does my personal credit have to be good in order to get approved for funding?
- Even though it's best to have good personal credit while building business credit, there are
some lenders who will give your business money even if you don't have good credit. These are
called Non PG lenders.

How often should I check my business credit pro le?

- It is advisable to review your pro le monthly. This is the simplest method for detecting faults
and resolving problems before they persist for too long.

Does time in business a ect my business credit pro le?

- Although the length of time you've been in business isn't a direct factor in your credit score,
having a company that's just been around for a year or two can make it tough to secure a small
business loan.
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