A few weeks ago we created a blog post in which we showed you how to build business credit from scratch from the ground up, even if you’re brand new. We got so many questions that we decided to make a follow up video (below) and go into more detail.
So who are the big three business credit bureaus?
And how are they different from eachother?
Commercial Equifax, Corporate Experian, and Dun & Bradstreet are the three major business credit bureaus. They gather and report data independently of each other, and each offers a unique strategy for building business credit
Dun & Bradstreet
What makes them unique?
Dun & Bradstreet is a dominant force when it comes to business to business credit and business to government credit. Which means that unless you are looking for a vendor line of credit, or bidding on a government contract, its practical uses are limited for the every-day small business owner.
Commercial Equifax
The 900 pound Gorilla of Business Credit
There are about a dozen business credit bureaus, but the largest by far is Commercial Equifax. Just about every creditor who lends to businesses reports to them, and they have specialized departments for dealing with niche industries such as medical, real estate, and staffing agencies. Chances are if your business has applied for a loan or a line of credit, that your Commercial Equifax Report will play a key role in determining the amount that you are approved for, as well as your interest rate and terms.
Learn how to Build Business Credit
Quick Tips on Building Business Credit
- Positive payment history on vendor credit lines (Tier 1 – Tier 3) can be established very quickly. It’s best to move up the pyramid after 2 or 3 billing cycles of positive payment history.
- NET 30 terms DO NOT function the same as traditional credit.
- Net 30 terms means that you must pay the balance in full every month.
- A lender will require a personal guaranty when you apply for a business loan or a line of credit (Tier 4), unless you meet their specific certain income or asset criteria. To put it simply, a lender must be comfortable enough to collateralize your business’s cash-flow or assets in lieu of you personal credit or assets.
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