Another option for building initial business credit is through vendors who offer net terms. When you purchase goods from a trade vendor, they will report your business credit to credit reporting agencies. However, it is important to note that only a small percentage (about 3%) of trade vendors are registered with credit reporting agencies. Therefore, it is crucial to find vendors who do report to these agencies, especially if your business has no credit history. One way to do this is to use start-up vendors such as Quill, Grainger, and Uline Strategic Network Solutions. These vendors will report to corporate credit rating services, allowing you to establish trade lines and build your business credit.
The Vendor Credit Tier refers to the level of business credit that is established through buying goods and services from suppliers or vendors that report to business credit bureaus. By paying bills on time, a company can establish a positive payment history with the vendors and have that reflected in its business credit profile, leading to the establishment of the Vendor Credit Tier. This tier is an important step in building a strong business credit history and can increase a company’s ability to access additional credit in the future.
Vendors who offer net terms can provide loans to their customers. Some vendors may require your EIN or 411 information. Starting with vendors like Quill, Grainger, and Uline Strategic Network Solutions can help establish business credit. These firms will provide credit and report the payment to business credit bureaus, helping to establish trade lines. As you gain more payment experience, you will become eligible for increased credit. Each vendor that reports to a single business credit agency counts as one payment experience, while those that report to multiple agencies add to the total payment experience, making it easier to build credit over time.