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To start building business credit for your business you want to start with Tier 1 vendors, which are starter vendor accounts.
They are also known as Net accounts. How these Net accounts work, is the vendor will give your business a product and give the business 30 days to pay for the product. This is known as Net 30. They also have Net 60 and Net 90 which means your business is given 60 or 90 days to pay the vendor. Some vendors that are in Tier 1 are Grainger, Uline, and a few of the gas cards. When ordering from them make sure that you know the requirements, because things are subject to change.
For example, Uline would automatically approve a business for a Net 30. Now their requirements are that the business purchase from them several times first and after that the business will be approved for a Net 30. It is recommended to pay the vendor 10 days before the due date. With gas cards, pay them as soon as the invoice is received.
When building your business credit, make sure the vendors that are picked reports to the credit bureaus, because 90% of the vendors will extend your business credit but they may or may not report to the credit bureaus. If this is the case, this defeats the purpose. Remember the purpose is to build the business credit and this can not be done if the vendors you pick do not report.
Finally, most vendors that you find in Tier 1 that does report, reports to Dun and Bradstreet. For more information on Dun and Bradstreet go here to read the article. If your business does not have a Dun and Bradstreet number, go here to watch a video on how to get a free Dun and Bradstreet number.
Join my group here. It is filled with resources and support for entrepreneurs to build their business credit! See what it’s about, here’s the link:
https://www.facebook.com/groups/businesscreditmasterycircle
I will see you on the inside!
About the Author
Kimberly Lewis is currently the CEO of EPC Solutions LLC. She specializes in helping business owners establish excellent business credit scores and then leveraging those scores to access credit and cash for their businesses. For more information on business credit scores, business credit and business loans visit https://epc-solutions.net.