Hey it's Ty Crandall with Credit Suite and in this short video we're going to talk about
Vendor Accounts we're going to talk about how do you use vendors to actually build an initial
commercial credit profile and score for your business that you can use to qualify for all kinds
of funding so let's jump in, so one way to build business credit is through what are called starter
vendors now these are vendors that basically offer you credit lines to buy the products and services
in their stores or buy them directly from them and then they give you terms like net
15 net 30 net 60 net 90 to be able to pay back whatever it is that you borrowed so for example,
a net 30 account means you have 30 days to pay back that account in its entirety and net 90
means you have 90 days to pay back that account in the its entirety so it frees up your cash flow
while also helping you get credit that reports the business credit reporting agencies and helping you
establish a business credit report and score um at the same time now this credit comes from
stores it comes from trade vendors who offer you credit to buy things in their stores it's
not backed by a mastercard it's not backed by visa so you can get this kind of credit without
even providing a social security number there's a reason I clarify this because in June of 2018
the government required banks from that day to verify your social security number to verify
your identity when you apply for any credit that's issued by a bank and if you go to Staples or Home
Depot or Lowe's or Costco any of those they issue credit cards but they're all backed by major banks
so they're always going to ask you for your social although you can get around the personal
guarantee and I'll teach you that in future training but the bottom line is with these vendors they don't
even ask you for a social cause it's not backed by major banks so you can get this kind of credit
without a personal guarantee without a personal credit check you can get it based sometimes
strictly only based on just having a business other times based on having some established
business credit and either way you it helps you establish business credit to become more
lendable to be able to have a better chance of getting more money and better terms for your
business now when you get your first accounts then they're going to report to one of the three reporting
agencies and you can ask the vendors that give you credit who they report to now here's the problem
97% of trade vendors don't report credit anywhere they don't report it to the commercial credit
reporting agency so I talked to a lot of people that think they have credit reporting on their business
credit reports because they got credit with all these people that have given them credit but none
of that credit gets reported so it always makes sense to ask the trade vendor if they report the
credit and who they report the credit to now when Dun & Bradstreet gets three of these accounts
reporting and if you have a DUNS number with Dun & Bradstreet they will create a credit report
for you Equifax and Experian will create a credit report for your business EIN with only one account
reporting so if you have one account reporting to Equifax or Experian commercial or three reporting
to Dun & Bradstreet then that will actually create your credit profiles for you with them and
again you can do this without any kind of consumer credit check even without supplying
your consumer your social security number for the approval, now you need at least three of these
accounts reporting to move on to the next step really you should have about five and I call
this payment experiences so the reporting of an account to a reporting agency is a payment
experience so if I have an account that reports to like Crown Office Supplies reports to Dun&
Bradstreet Equifax and Experian that counts as three payment experiences and you only need five
to move on to the next step so typically if you have three accounts reporting and they report to one or
more reporting agencies like many of them do report to two or more then you're able to have five
account's total across all three bureaus then you're able to move on to the next step, the next step is
you're able to move on to revolving store credit which is credit with almost all major retailers and
you're able to do this without a guarantor, you're able to do this without a personal credit check
you're able to do it without your personal FICO score being looked at it's basically a way for your
business to fund itself as you continue to prove yourself and build your business credit you get
more revolving cards then you'll get fleet credit fuel to credit to get fuel in your vehicles maintain
vehicles repair vehicles then you'll be able to move on to the final tier which I call cash credit tier
where you can get VISA cards you can get mo MasterCard you can get auto financing without a
personal guarantee in credit six so one of our clients got a $185,000 in
financing at Ford without a personal credit check and without a personal guarantee that's what you
get to in the very final stage of building business credit takes about 14 accounts to get here that are
reported on your business credit reports and at least one of those accounts should have a $10,000
a high uh limit before you move on to that final tier but again the first step well the first step
is building your fundability which I didn't dive into in this training but you can check
any of our social channels and you'll find our training on building your fundability
once your fundability is in line once you look credible once you're lendable then you move on
and start using vendors to establish initial business credit profile and score once you
have three accounts reporting or a total of five payment experiences across your credit bureaus
then you're able to move on to retail credit eight accounts get you to fleet credit
14 accounts with one of them having a $10,000 high credit limit
get you to cash credit auto financing it's all based on how many accounts you have reporting
on your business credit boards to learn more and get our training on the exact steps to build your
business credit including how to get the other kind of credit and improve your fundability grab
our free guide at creditsuite.com/ein that's creditsuite.com/ein