When you apply for business credit, there are a few strategies that you must know before you make an application. Business credit works best when you follow a proven formula that will minimize any risk of getting a denial. Getting denied at any stage can be difficult to over ome. In many cases, once denied, you may very well need to start over with a new business entity. A good business credit builder can help.
There are many lenders who are willing to extend business credit based solely on a Paydex score. Today many people still do not take the time to build business credit. Having a well prepared business entity is essential, as is making sure you have done the credit-ready conditions that most lenders will also require. These are items such as address, 411 listing, and other small conditions that you do not want to overlook or you could get denied.
Below is the basic process of building business credit.
- Apply for 5 vendor lines of credit. This is the easiest round of funding and you are guaranteed to get approved assuming you have met the basic credit ready conditions. The lenders include Office Max, Office Depot, and other supply credit accounts. Simply buy $50 with of items or supplies and make a payment…on time of course.
- Apply for Credit Cards. When applying for credit cards, be certain that the 5 vender lines are reporting. Often you will need to call them directly and ask to report you timely payments. At this stage you can apply for credit cards like Visa, MasterCard, American Express etc. Making payments on time will further strengthen your business credit and set the stage for the next round of funding which is…
- Apply for a bank line of credit. Assuming you have made payments on time, and they are being reported, you can apply for a bank line of credit. This will additionally strengthen your business credit showing 5 vender trade lines, 3 revolving lines and 1 installment line. This variety of credit should Yield a Paydex score of over 75-80+ and set the stage for future credit. Be sure to research the 20 items that are needed before you apply for any credit or you run a high risk of being denied.