Business Credit Tradelines
Clean 2 to 12 year old shelf companies for less.
The Right and Wrong Way to Get Business Credit Tradelines
Understanding Business Credit Reporting
Business Credit Tradelines are credit lines that provide information to Business Credit Bureaus.
- Tradelines are made up of account data such as
- The date opened
- Payment history
- Account balance
- Date reported
- One tradeline corresponds to one reported account.
- Tradelines are individual records of your available credit lines, which is why utilities normally do not report.
- Tradelines are used to establish your creditworthiness for other types of credit.
If the tradeline is not used, they may cease reporting to Build Small Business Credit Bureaus.
Legitimate Business Tradelines
- A few of the tradelines that report business credit include:
- Vendor credit lines
- Business credit cards
- Bank credit cards
- Vehicle loans
- Installment loans
- If you use tradelines, you can quickly establish credit; however, there will be no data to report if you do not have a payment history.
Reporting
Business Credit Tradelines Reporting
Business Credit Tradelines can report to any of the three major commercial credit bureaus:
- Dun & Bradstreet
- Experian
- Equifax.
- Because not all tradelines report to each bureau, having a credit-building strategy is critical.
Misconceptions About Business Credit
There are various myths about establishing company credit.
1. An EIN creates a business credit profile
An EIN does not establish a Business Tradelines profile.
- You must verify and register your information with all three commercial credit bureaus.
- To have a credit profile, you must also have reporting accounts.
2. Making business payments automatically results in a good credit score.
- The majority of business payments are unrelated to credit accounts.
- 97% of accounts do not report to credit bureaus.
3. You should apply for additional accounts as soon as you are accepted for your first.
- You should wait for your accounts to report before moving on to the next credit tier.
- Through waiting, you can acquire
- Better account alternatives
- Better terms
- Easier qualifications
4. Good Paydex and credit ratings guarantee approval from all creditors
- Good Paydex and credit scores do not ensure lender approval.
- Scores simply tell a lender whether or not to evaluate your credit.
5. Business credit is built the same way as personal credit.
Business credit is not developed in the same manner that personal credit is; both are entirely different processes.
- Secured cards are far less effective than gaining fast access to credit lines.
- Vehicle finance is only accessible after you have established your credit; there are no starter vehicle financing choices available.
6. Business credit is only useful for net vendor credit lines
- Business credit offers additional advantages than simply establishing net vendor credit lines.
- You can acquire access to thousands of dollars in credit with business credit through
- Revolving vendor accounts
- Business credit cards
- Vehicle finance
- Lines of credit.
- There are net, revolving, and payment options available.
Wrong Way
The Wrong Way to Build Business Credit Starting with Personal Tradelines
The top three ways people fail to generate Business Credit Starting with Personal Tradelines are
- Buying tradelines
Buying shelf corporations
- Generating CPNs
- If you are caught performing any of these things, your funding efforts will be ruined.
Piggybacking Tradelines
- Piggybacking tradelines is a technique that involves seasoned tradelines.
- Creditworthy accounts are used to help an unconnected third party’s credit.
- A creditworthy borrower adds the third party to their credit lines as an authorized user.
They do not, however, furnish the third party with materials such as credit cards or account details for them to make charges against that account.
- As a result, the authorized user never spends the credit.
- The third-party benefits from an artificially inflated credit rating.
- As a result, it seems like they have already been accepted for higher-limit revolving accounts.
- In theory, demonstrating that you already have credit should make you more creditworthy for higher limit accounts.
- Many companies claim to be able to get credit lines ranging from $100,000 to $250,000 after these accounts are reported.
- Essentially, by hiding behind a well-established organization, you are lying about your own company’s credentials.
- Because business credit is linked to your business information, it does not appear on your business credit record when registered under a different business.
- There are no reporting authorized users on vendor accounts.
- Underwriters can search Authorized User accounts based on a company’s age, activity, and relevancy.
- Because of someone else’s use, credit cards can harm your score.
- One tradeline that you will be unable to use could cost you up to $2,000.
- In these types of schemes, the FBI has concluded that the tradeline company may be a forgery and the primary cardholder may be a stolen identity.
- Authorized user abuse can result in up to six and a half years in prison.
Piggybacking will catch up to you
- If you spend money to raise your credit scores without performing any of the work, you may be misleading potential investors about your creditworthiness.
- When you acquire a tradeline, the seller will do a credit check because they want to make sure they are paid.
- D&B, for example, will affect whether you purchased tradelines sooner or later.
If a Business Credit Tradelines sales organization conducts a credit report inquiry, D&B will discover fraud.
- The process of shutting down your tradelines is only the beginning.
- D&B will flag your whole profile, terminate any legitimate and fraudulent deals, and you will lose any time or money you believed you had gained.
Shelf Corporations
Shelf corporations are companies that were founded and then set aside to mature.
- The corporation is founded on paper,
- but it never conducts any business. There may be a credit history, but that is not always the case.
- Because the business is dormant, there are no real assets or value associated with it.
- Corporations basically re-age when a new owner takes over.
- Shelf firms are a waste of money because they provide no tangible benefit.
CPNs
- CPN is an abbreviation for Credit Privacy Number or Credit Profile Number.
- A CPN is a nine-digit number that resembles a Social Security Number (SSN).
- CPNs are for customers, not for the company.
- They are not a substitute for credit or identity.
- Banks and the federal government do not recognize CPNs.
- Federal and banking requirements demand that you apply with your Social Security number.
- It is prohibited to use a CPN to apply for credit at a bank.
- Checking and savings accounts, SBA loans, and bank loans are examples of assets.
Avoid The Wrong Ways of Building Business Credit
- Lenders and CRAs are aware of all unethical practices.
- Investors are aware of what to look for and are continuously on the lookout for fraud.
- When they see a new authorized user on a card, they will investigate the account right away.
Available Business Credit Lines
Fleet Credit
- Fleet credit is used to purchase gasoline and vehicle upkeep.
- Fleet credit can be used to finance any type of vehicle, from business vehicles to tractor-trailers.
- Net terms are available through Fleet Credit.
Retail Credit Vendors
- Retail credit is provided by companies such as
- Staples
- Amazon
- OfficeMax.
- Retail companies frequently provide net or revolving terms.
- These credit cards can assist you in obtaining whatever you require to manage your corporation.
Business Credit Cards
- Bank credit cards are generally more widely accepted.
- Examples of common bank credit cards include
- Visa
- MasterCard
- American Express
- Discover
- Capital One
Recap
- Slow and steady wins the race when it comes to company credit.
- Take your time developing a good business plan that allows for credit expansion.
- Avoid shortcuts; if something sounds too good to be true, it probably is.
Purchasing Business Credit Tradelines will jeopardize your company’s credit-building efforts.
- It’s deceptive and could be part of a broader fraud campaign.
- Don’t put your company through the hassle of illicit credit building.
