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Why we Love Business Credit Builder Programs

Published By Janet Gershen-Siegel at January 21st, 2018

Business Credit Builder Programs are Awesome

Business credit builder programs can help you, because building business credit means that your company obtains chances you never knew you would.

How Business Credit Builder Programs Work

Let’s look into unsecured business credit as a way to establish business credit. These will report to business CRAs, not personal CRAs. You do not need proof of cash flow or collateral. There is no time in business requirement. Only pay on what you owe, not like a loan.

You can frequently get a 0% introductory rate (usually 6 to 18 months). This is perfect for startup businesses and high-risk industries. It is how business credit builder programs operate.

The General Idea

A lender works on your behalf to acquire credit cards for you. The firm is neither a loan provider nor a credit card issuer. Instead they function as experts in getting credit cards. And they work to apply to get you the most credit they can get.

Nearly always, their tactics to get you credit result in far more than you could get on your own. This is because they go for several cards for you.

Get Amazing Credit Cards

They work to get you 5 – 8 cards, often the best and highest-limit credit cards you can get. And they apply simultaneously. So they get five to eight credit cards. If you applied on your own you would only get one to two at most. They commonly get you five times the amount of your present highest limit account.

Contrast this with your bank, which can only get you one of these types of accounts which often doesn’t report to the business CRAs.

You get two sorts of cards. The first is personal cards, which report to consumer credit reporting agencies. And the second is business credit cards, which do not report to consumer CRAs.

Rates

Which one you get, and how much money you get all depends on just one thing. And this is personal credit quality. The lender can also get you low introductory rates, often 0% for 6 to 18 months. You will pay standard rates after that.

This is generally 5 – 21% APR with 20 – 25% APR for cash advances. They also get you the best cards for points. So you get the finest rewards.

Business Credit Builder Programs

Learn more here and get started toward establishing company credit with business credit builder programs.

Details

Credit is obtained with no security, assets, or collateral. Lender has no collateral to collect in case of default. Since there is no collateral, and they don’t look or care about your cash flow, all that matters is your personal credit.

With a 650 you will get just personal cards. But with a 680 credit score, you will get both business and personal cards.

Advantages

Having several cards fosters competition; get your limits raised normally within six months or less from first approval. You can get approvals to $150,000 per entity, such as a corporation. Most lenders do not offer or advertise this.

You will get cash, and build small business credit, too. In 3 to 4 months, use your newly built small business credit to get even more money.

Qualifications

Here’s how to get approval for unsecured business credit. You need top quality credit with no derogatory reporting. This means: no bankruptcies, ever, on the report, but you may get an approval with bankruptcy, if not on report.

Any judgments and tax liens must be paid off. You can have no credit counseling, and no late payments in the last 12 months. You can have no active outstanding collections in unpaid status, less than $500 could be okay. And you can have no foreclosures or late mortgage payments.

You need to have at least one bank card with a three-year history or $3,000 limit. If there is no car loan or mortgage, then you will need two bank cards.

Business Credit Builder Programs

Learn more here and get started toward establishing company credit with business credit builder programs.

Balance/Limit Ratios

They look at your balance/ limit ratios on existing revolving accounts. The lower the ratio, the higher the amount of the approval. A 30% ratio is a requirement. This looks at overall percentage, and individual percentage on each account.

Credit inquiries are a substantial factor tying into approval. More than six inquires in six months will be too much. Lenders do not wish to see the person is applying for new credit, especially no other revolving accounts.

Guarantors Welcome

Use a guarantor or a credit partner to raise the numbers; frequently these people want a piece of the business in exchange for their assistance. Creditors want to know you’ll pay them back. Most sources will charge 9 to 12% success-based fees. Only pay the fee off what you secure.

Fees

Pay an average of 10% on the amount you borrow. Lenders on all loan programs charge fees; you easily pay 5% or higher even on an SBA loan. But this program, like most others including the SBA, will “roll-in” your fee. So you do not pay up front.

Once you get your credit cards, the fee is invoiced; this is one invoice per card.

Enhance What Business Credit Builder Programs Are Doing – And Build Business Credit

Business credit is credit in a small business’s name. It doesn’t attach to an owner’s consumer credit, not even if the owner is a sole proprietor and the only employee of the small business.

Because of this, a business owner’s business and individual credit scores can be very different.

The Process

Building small business credit is a process, and it does not occur without effort. A small business will need to actively work to establish company credit.

However, it can be done readily and quickly, and it is much faster than building personal credit scores.

Merchants are a big aspect of this process.

Undertaking the steps out of sequence will cause repetitive denials. Nobody can start at the top with company credit. For instance, you can’t start with retail or cash credit from your bank. If you do, you’ll get a denial 100% of the time.

Company Fundability

A company needs to be fundable to lending institutions and merchants.

As a result, a small business will need a professional-looking web site and email address. And it needs to have site hosting from a company such as GoDaddy.

Also, company telephone and fax numbers ought to have a listing on 411.com.

In addition, the company phone number should be toll-free (800 exchange or the like).

A business will also need a bank account devoted solely to it, and it has to have every one of the licenses essential for running.

Licenses

These licenses all must be in the correct, appropriate name of the small business. And they must have the same small business address and phone numbers.

So bear in mind, that this means not just state licenses, but potentially also city licenses.

Working with the Internal Revenue Service

Visit the Internal Revenue Service website and acquire an EIN for the small business. They’re free of charge. Choose a business entity like corporation, LLC, etc.

A small business can start off as a sole proprietor. But they will more than likely want to switch to a form of corporation or an LLC.

This is in order to minimize risk. And it will take full advantage of tax benefits.

A business entity will matter when it pertains to taxes and liability in case of litigation. A sole proprietorship means the entrepreneur is it when it comes to liability and tax obligations. Nobody else is responsible.

Sole Proprietors Take Note

If you run a company as a sole proprietor, then at the very least be sure to file for a DBA. This is ‘doing business as’ status.

If you do not, then your personal name is the same as the small business name. Because of this, you can find yourself being personally accountable for all company debts.

Plus, per the IRS, with this arrangement there is a 1 in 7 probability of an IRS audit. There is a 1 in 50 probability for corporations! Steer clear of confusion and substantially lower the chances of an IRS audit at the same time.

Instigating the Business Credit Reporting Process

Begin at the D&B website and obtain a totally free D-U-N-S number. A D-U-N-S number is how D&B gets a small business into their system, to generate a PAYDEX score. If there is no D-U-N-S number, then there is no record and no PAYDEX score.

Once in D&B’s system, search Equifax and Experian’s web sites for the small business. You can do this at www.creditsuite.com/reports. If there is a record with them, check it for accuracy and completeness. If there are no records with them, go to the next step in the process.

In this manner, Experian and Equifax will have something to report on.

Vendor Credit Tier

First you must establish trade lines that report. This is also referred to as the vendor credit tier. Then you’ll have an established credit profile, and you’ll get a business credit score.

And with an established business credit profile and score you can begin to get credit in the retail and cash credit tiers.

These types of accounts often tend to be for the things bought all the time, like marketing materials, shipping boxes, outdoor work wear, ink and toner, and office furniture.

But first off, what is trade credit? These trade lines are credit issuers who will give you preliminary credit when you have none now. Terms are often Net 30, versus revolving.

So, if you get an approval for $1,000 in vendor credit and use all of it, you must pay that money back in a set term, such as within 30 days on a Net 30 account.

Details

Net 30 accounts need to be paid in full within 30 days. 60 accounts have to be paid in full within 60 days. In comparison with revolving accounts, you have a set time when you have to pay back what you borrowed or the credit you made use of.

To kick off your business credit profile the right way, you ought to get approval for vendor accounts that report to the business credit reporting bureaus. As soon as that’s done, you can then make use of the credit.

Then pay back what you used, and the account is on report to Dun & Bradstreet, Experian, or Equifax.

Vendor Credit Tier – It Helps

Not every vendor can help in the same way true starter credit can. These are vendors that will grant an approval with negligible effort. You also want them to be reporting to one or more of the big three CRAs: Dun & Bradstreet, Equifax, and Experian.

You want 5 to 8 of these to move onto the next step, which is the retail credit tier. But you may have to apply more than once to these vendors. So, this is to prove you are responsible and will pay promptly.

Retail Credit Tier

Once there are 5 to 8+ vendor trade accounts reporting to at least one of the CRAs, then move onto the retail credit tier. These are businesses like Office Depot and Staples.

Just use your SSN and date of birth on these applications for verification purposes. For credit checks and guarantees, use the business’s EIN on these credit applications.

One good example is Lowe’s. They report to D&B, Equifax and Business Experian. They need to see a D-U-N-S and a PAYDEX score of 78 or more.

Fleet Credit Tier

Are there 8 to 10 accounts reporting? Then move to the fleet credit tier. These are businesses like BP and Conoco. Use this credit to purchase fuel, and to fix, and maintain vehicles. Only use your Social Security Number and date of birth on these applications for verification purposes. For credit checks and guarantees, make certain to apply using the company’s EIN.

One such example is Shell. They report to D&B and Business Experian. They need to see a PAYDEX Score of 78 or more and a 411 company telephone listing.

Shell might claim they want a specific amount of time in business or revenue. But if you already have sufficient vendor accounts, that won’t be necessary. And you can still get an approval.

Cash Credit Tier

Have you been responsibly managing the credit you’ve gotten up to this point? Then move to the cash credit tier. These are service providers such as Visa and MasterCard. Just use your Social Security Number and date of birth on these applications for verification purposes. For credit checks and guarantees, use your EIN instead.

One example is the Fuelman MasterCard. They report to D&B and Equifax Business. They need to see a PAYDEX Score of 78 or higher. And they also want you to have 10 trade lines reporting on your D&B report.

Plus, they want to see a $10,000 high credit limit reporting on your D&B report (other account reporting).

In addition, they want you to have an established small business.

These are businesses such as Walmart and Dell, and also Home Depot, BP, and Racetrac. These are commonly MasterCard credit cards. If you have 14 trade accounts reporting, then these are attainable.
Business Credit Builder Programs

Learn more here and get started toward establishing company credit with business credit builder programs.

Monitor Your Business Credit

Know what is happening with your credit. Make certain it is being reported and attend to any inaccuracies as soon as possible. Get in the habit of taking a look at credit reports and digging into the specifics, and not just the scores.

We can help you monitor business credit at Experian and D&B for only $24/month. See: www.creditsuite.com/monitoring.

Update Your Information

Update the information if there are mistakes or the info is incomplete.

Fix Your Business Credit

So, what’s all this monitoring for? It’s to contest any inaccuracies in your records. Errors in your credit report(s) can be fixed. But the CRAs generally want you to dispute in a particular way.

Disputes

Disputing credit report inaccuracies generally means you mail a paper letter with duplicates of any evidence of payment with it. These are documents like receipts and cancelled checks. Never mail the original copies. Always send copies and retain the original copies.

Fixing credit report errors also means you specifically itemize any charges you challenge. Make your dispute letter as clear as possible. Be specific about the issues with your report. Use certified mail so that you will have proof that you sent in your dispute.

A Word about Building Business Credit and Business Credit Builder Programs

Always use credit smartly! Don’t borrow beyond what you can pay off. Track balances and deadlines for payments. Paying promptly and completely will do more to raise business credit scores than virtually anything else.

Building small business credit pays off. Great business credit scores help a company get loans. Your lender knows the small business can pay its debts. They understand the small business is authentic.

The small business’s EIN connects to high scores and lenders won’t feel the need to demand a personal guarantee.

Business credit is an asset which can help your company in years to come. Learn more here and get started toward building company credit.

A Word to the Wise About Business Credit Builder Programs

Responsible credit management is a must. Always use credit responsibly! Don’t borrow more than you can pay back. Keep track of balances and deadlines for payments. Paying on time and in full does more to raise scores than nearly anything else.

Once you know what influences your business credit score, you are that much closer to creating enhanced corporate credit. And you can do this with business credit building programs.

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