A key feature of business credit cards is that they typically carry more weight than vendor lines in the business credit scoring process. Our Business Credit Building System contains extensive research on business credit cards and includes what they require for approval.
Throughout the business credit building process it is important that you minimize lender inquiries. To do that you need to keep declines to a minimum. How? By knowing what the business credit card issuers require for approval. You need to be prepared before you apply. This is just one of the many benefits of our Business Credit Building System.
Another benefit of our system is all of the invaluable tips and industry secrets. A credit building tip for business credit cards is that it is important to carry balances that are no more than forty percent of your available credit limits. The secret is that credit card providers do not report your “available” credit limit, so most lenders assume your "available limit" is your "highest reported balance". That means when you first receive a business credit card you need to run it up to its limit (not over) and after you receive your first bill, then pay it down to the forty percent level. Going forward you need to maintain a balance of around 30 to 40 percent to optimize your business credit scores.
There are over 500 business credit cards in the United States, but your business needs only three that report. The key is in the reporting. Do you know which business credit cards will report your payment history? If so, do you know what they require for approval? If you apply for business cards on your own, you only increase the likelihood of getting declined. Making sure you know what the lender requires before you apply greatly increases your chances of approval.
Since 1995 more than 50,000 businesses have successfully completed our Business Credit Building System. Our system is very comprehensive, straight forward, and easy to use. If you follow and complete the steps it will result in strong business credit scores each and every time.
You could spend hundreds of hours researching and still not find the wealth of information and instruction inside our Business Credit Building System. Lenders want to approve your business. Now it is up to you to make that possible.
There is a right way and wrong way to do almost everything. The same is very true for building strong business credit scores with the three national business credit reporting agencies: Experian Smart Business Reports, Equifax Small Business Financial Exchange and Dun & Bradstreet.
For example, many businesses set up as sole proprietors and operate for years under the mistaken assumption that they can, and have, built business credit scores. This mistaken assumption is actually fostered, in part, by the business credit reporting agencies themselves because they will give a sole proprietorship a credit file and even assign business credit scores.
So if that is true, then what makes it a mistaken assumption? Well, in the case of sole proprietorships and partnerships, all loans and credit lines extended by lenders, banks, business credit cards, vendors, etc. are tied directly to the owners personally. As an owner or partner you are 100% personally responsible for the repayment regardless of what happens to your business. You are “doing business”, but are not truly ”a separate business".
In order for your business to build business credit scores that are completely separate from you personally, your business must either be an incorporation (INC or S-Corp) or a limited liability company (LLC). These business formations create a stand-alone "entity" which lenders and credit providers then treat as a entity that is separate from you personally. Now, when you build business credit scores, the loans and lines you receive are not tied to your social security number and will not show up or report on your personal credit reports.
The following is another common misconception about business credit, “I already have a PayDex score with Dun & Bradstreet, so I have built business credit”. It is true that Dun & Bradstreet is a valuable part of the equation to building business credit scores, but they only represent one-third of the overall task. Experian Smart Business and Equifax Small Business Financial Exchange are of equal value and they serve different markets.
If your goal is to obtain loans or lines from a bank then Equifax may be the most important component of your credit building process. Equifax operates the Small Business Financial Exchange. The Exchange is primarily where banks share business data between themselves. So, if you do not build strong business credit scores with Equifax, you may be eliminating your chances for true bank financing.
Many business credit card providers, leasing companies, vendors, and even commercial landlords rely heavily upon Experian BIS (Smart Business Reports) data when it comes to making approval decisions. Building business credit is not complete without having a strong Experian Smart Business profile and score.
Our Business Credit Building System walks you through getting your business credit files opened with all three national business credit reporting agencies. It gives you step-by-step instructions for setting your business foundation "the right way", the first time. The instructions are comprehensive, very clearly spelled out, and the methods have been proven by over 50,000 business owners before you.
Most banks and commercial lenders have a checklist of 20 items that your business must have completed to be considered “in Compliance”. The problem is that business owners simply aren't aware of these items and, even if they were, don't know how to go about properly addressing them.
On the surface, most of these 20 Compliance Items would appear to be simple tasks but, unfortunately, that isn't always the case. As an example, one of the verifications that most lenders and credit providers perform is to call directory assistance and ask for the listing under your legal business name. If there is no listing then you'll more than likely be declined. But having your business properly listed with 411 directory assistance under its exact legal name is a simple task. Isn't it? It can be much harder than you think.
Is your business phone a VOIP, or a virtual system, or a cell phone? Call your local 411 now and ask for your business under its legal name (your business name as listed on your State filing). 411 calls route from your local service provider to the carrier for the phone you are calling from, such as AT&T routes to AT&T, Verizon to Verizon, etc. Let’s say you have AT&T and you call 411 to find that your business is listed. Now use a friend’s phone that has Verizon, Cox, or any other local provider. Is your business still listed? What about a lender who calls to verify from an outside area code? They would more than likely dial 1-XXX-555-1212. Be sure to test for that too because, in many cases, those calls route to the national directory assistance database and not to the local service provider.
Included with our service is a free submission to the national directory assistance database along with detailed methods on how to ensure that all your local area carriers have a listing for your business.