What is Business Credit File?
By Jake Song
Business Credit File is the representation of your company’s reputation. Just like how we as consumers, have a personal credit file that reflects our payment history, credit card accounts, etc, a business credit file contains much information about your company. In addition, based on your business credit profile, lenders can ultimately make predictions on the risk of your business. So is it essential to know about your business credit file? Ah yes! Your fundability as a company is relying based on your business credit profile.
Your Business Credit File = Fundability
Let’s go over by the definition of Fundability first. The word “Fundability” means how your business looks to lenders in regards to return on their investments. Remember, lenders are in for the profit business, so if your business seems NOT fundable, then they will have no second thought of lending credit.
So What are some businesses that consider being fundable?
- Business license check
- Business phone number and website check
- Business Fax number check
- Business legal filings check
- Business payment history check
- Business banking history check
- And more..
These are just a few qualifications of what lenders are looking into your business. It is absolutely crucial to have all fundability requirements set up correctly before applying for any loans and credit.
How To Setup a Business Credit Profile?
There’s a good chance that most of the readers who are reading this check their credit scores via CreditKarma. Unlike your personal credit score, a business credit score does not generate automatically. There is no FREE online tool; you can utilize to check your business credit score. To be completed, you have to take action and acquire it. Most importatnly, you must pay for it. The most commonly used business credit profiles are from Dun & Bradstreet, Experian, & Equifax. Again, before you open any business credit profile, you must SET UP your business correctly. All of your business profile information must be correct. I have seen so many different business owners who don’t even have an actual business address and a phone number. Setting up your business to receive proper funding is the first rule of the game! In our FlyCredit, we help clients save over 90% of credit monitoring programs.
Get Vendor Account(s) Report To Your Business Credit Bureaus.
If you currently have a business relationship with vendors, find out if they report your payments to business credit agencies. For instance, let say you were to have a business store credit card with Quill, Staples, and Grainger, they will report to your business credit bureau. But always make sure to double-check with them! For future vendors, always ask this question before you start a business relationship with them. FYI: Less than 20% of vendors only report to all credit bureaus. So it is crucial to verify this before starting a business relationship.
Which Vendor Accounts To Get? How Do I Start Building A Business Credit Profile?
When it comes to building business credit, we (FlyCredit) help clients to receive vendor account from different credit vendor tiers. First-tier is, starting vendors like Quill, and Grainger. Ultimately, by working with us clients can receive over 30 different credit vendors who will report to business credit bureaus. These vendor accounts will extend pay net 30 terms without a personal credit check, which means you can get a vendor credit account without using your SSN! Just your EIN! After you get enough starting vendors, you can start to apply for Cash credit tier accounts such as visa, Amex, and MasterCard. These are the cards that you can use anywhere and whenever. Typically around 2-3 months into our Business Credit Mastery Program, clients can receive funding upwards of $157,000 with no personal guarantor.
Your business credit profile is the foundation of your business’ success. By leveraging business credit, you can transform your business to the next level.
As always, check our daily blog post from www.fly.credit