You’re looking for business credit hacks to speed up building your business credit? We’ve got exactly what you need.
Your business credit profile is extremely useful when measuring the financial health of your business. Also, credit grantors can see how your business meets its financial obligations.
Building a solid credit history is one of the essential steps to your company’s success.
In this article – you’ll find out precisely what it takes to build business credit faster and what kind of tips, tricks, and hacks you can implement.
Here’s what you can do.
Is there a hack to building business credit faster?
In short – yes.
There are numerous ways to build your business credit faster – from getting a business credit card to obtaining several new vendor tradelines.
We’ll go through the 6 best business credit hacks for building your business credit. If you’re looking for an optimal growth level for your company, make sure that you implement every single thing you find in this article.
Business Credit Hack #1: Check your current business credit files
Firstly, you need to check your business credit files – and there is a good reason for that. By Federal law, you are entitled to a free copy of your business credit report every 12 months.
Every credit reporting agency – Equifax, Experian, Dun & Bradstreet – will provide you with a free credit report when you ask for it.
If you don’t have a credit file with these agencies or you’re just starting with your business – set it up by registering for a DUNS number with Dun & Bradstreet.
Now is the time to check for every single error you can find. Credit report errors are a common occurrence, and they have a substantial impact on your business credit.
Once you identify all the credit report errors, you’ll want to report them to the credit report agency that issues the report. Of course, there are some additional steps you’ll need to take, but in short – finding and reporting credit report errors is the first thing you’ll want to do.
You don’t want your hard-earned business credit to be misreported, so make sure you go through every credit report you can get your hands on.
Even though this may seem like a regular step – not many business owners even check their credit files. For this reason, we deem this to be our first business credit hack on the list.
Business Credit Hack #2: Add new trade references to your credit files
Adding new trade references to your credit files can massively impact your business credit building.
A trade reference is a source that supplies past payment experiences between a business and a vendor.
If you can encourage your business partners to submit trade references, you’ll have better chances of demonstrating a pattern of responsible financial behavior. By manually adding new trade references to your credit files, you’ll be able to impact your business’ ratings and build your business credit faster.
Remember that many of your business partners and vendors will be proactive when sharing this information with credit bureaus. And yet, they aren’t required to do so by any means. Still, you can manually add these trade references, so make sure you make the most out of it.
This is one of the lesser-known business credit hacks – and we’d like to see you implement it in your business!
Below, you’ll find a video on trade references, fully explaining what they are and how to obtain them.
How exactly can you establish trade references?
When applying for credit terms with a new partner/supplier, they may call your trade references directly, or they could decide to use credit bureaus to view credit ratings.
This tells us immediately just how important trade references are.
Here are three simple steps to establishing trade references.
Step #1: Build relationships with your vendors
Like any good personal relationship, business relationships with your partners are built on trust.
The more your business partners know you and your business, the more likely they will become your trade reference. Still, building a relationship with your business partners means working with them consistently. When you start relying on them, and they start relying on you, your business relationship starts to develop.
Of course, this takes time. Getting net 30 payment terms can make this easier for you, as it’s a much easier technique to help your cash flow than using a business loan.
Step #2: Every single payment must be on time; no late payments
This is more a rule than a step. Still, the importance of making payments on time is gigantic.
In addition to building trust with your business partners, you must pay your vendors and suppliers on time. Many times, it’s even better to make these payments a little earlier.
Some vendors may offer you 2/10 net 30 payment terms, meaning that if you make the payment in the first 10 days, you’ll get a 2% discount on the total amount.
Keep in mind that making payments on time consistently will get you far regarding business credit. This gives your business credibility and is a huge factor in defining your business credit score.
Even if you miss one payment, it will not damage your relationship with a specific partner/supplier/vendor, as long as your payment history is spotless.
Step #3: Request that your suppliers and vendors report to credit bureaus
When a bank, vendor, customer, or even insurance company wants to check your business’s credit – they’ll do that through a credit bureau.
If possible, request that every single partner you’re doing business with report your payments to credit bureaus.
A long history of solid payments can ensure you get better credit terms, lower interest rates on loans, and access to credit lines with numerous suppliers and vendors.
Business Credit Hack #3: Build business credit with net 30 vendors that report to credit bureaus
Not all businesses you work with will report your payments to credit bureaus. And this information is something you can obtain by simply exploring their website or contacting them through email.
This business credit hack refers to working only with vendors, suppliers, and partners that will report your payments to your business credit report.
To help you out here, we created a list of 10 best net 30 vendors you can open an account with. And they all report to your business credit report!
A long payment history helps build your business credit faster, so be sure to ask all your current vendors and partners whether they report your payment activities. Such long payment history will help build your credit rating, opening many doors for your business.
This will lead to better financing terms from lenders and increase your business’s overall reputation. The more reputable your business is, the more businesses want to work with you.
Business Credit Hack #4: Get a business credit card – and use it for business expenses
Another great business credit hack on this list is something more of a necessity.
Naturally, you’ll want to use that business credit card for all business expenses, like office supplies and equipment. Also important to note is that many business credit cards will provide you with perks such as cashback or even travel rewards.
The most important thing about business credit cards – if you’re financially responsible and make every single payment on time, you can easily build a strong business credit history. This will help your business qualify for additional and better financing options.
Still – every business credit card comes with a limit. And when you’re trying to finance large purchases or invest in a timely business opportunity, a business credit card won’t be enough.
Here, you’ll need to think about more flexible financing options or to be more accurate – a business line of credit.
Obtaining a solid business line of credit will offer you a revolving balance that will replenish as you pay off what you’ve used.
How does this work?
For instance – when you complete your first purchase on The Red Spectrum and open your net 30 vendor account, you’ll get $3500 in credit limit. And with every additional product purchase, you’ll get $1500 more in credit limit.
The catch is – you need to pay that back. When you buy a certain product with a credit limit, you’ll have 30 days to pay it back.
Suppose you’ve purchased a $100 product with a credit limit. You’ll get that product right away without having to pay the price. And in the next 30 days, you’re obligated to pay back that amount.
You may be thinking now – but what if I don’t pay?
Firstly, if you’re late with payments, you’ll most likely get a 2% (or any other percentage) penalty fee.
But if you intend on not paying at all – be aware that vendors have a wide range of tools and tactics to deal with this. And not to mention that almost every net 30 vendor has a legal team behind them dealing with this kind of issue.
P.S. – If you have a personal credit card and want to use that too to build your business credit – here’s a guide on how to use a personal credit card for business!
Business Credit Hack #5: Make every single payment to your creditors on time
Your financial responsibility and financial habits have a huge impact on building your business credit. One of the best business credit hacks is simply – paying your creditors on time.
You may think that it’s completely a trivial thing, but having a spotless and long payment history can get you far.
Consistently paying every single due before the due date speaks volumes of your financial responsibility – and it looks phenomenal in the eyes of lenders.
Also, before closing a partnership deal with a certain business, be sure that they will check your payment history. Avoid missing a payment and ensure that your payment history looks perfect.
This is one of the business credit hacks that can get you far – even though they’re so simple and trivial.
Business Credit Hack #6: Correct any inaccuracies in your future credit reports – and monitor them
You’ve learned all the business credit hacks – and applied them. You’ve spent a ton of time building your business credit. And now is up to you not to let it go.
There is one thing you can be sure of – your business credit report will almost definitely contain some errors. It’s up to you to make it right. You must monitor every single business credit report that gets issued.
As FTC’s study points out, 79% of credit reports contain errors. And according to Consumer Reports, more than a third of Americans find errors in their credit reports. These numbers alone tell you you’ll need to rely on yourself regarding business credit building.
Here’s a guide on how to identify and dispute errors in your credit report so don’t miss out on reading it. It will be more than useful when the time comes to check your credit report.
And if you’d like to know more about monitoring your credit reports regularly – here’s a video that will show you how you can do it yourself.
We can all agree – both you and us – no one should have to spend time going through credit reports every month, identifying errors, and dealing with the entire arbitrary process that can sometimes be long and tiresome.
Fortunately, there’s a solution for this.
Bonus: Start building your business credit on blockchain
This bonus business credit hack is the most important one on the list.
Just imagine how often you’ve found an error on your credit report. Now, combine that with all the times you didn’t even check your credit report for errors, or some errors simply sneaked in under your watch. It’s happening all the time to every single business in the USA.
And now – we finally have the solution. Factiiv.
Factiiv is the first-ever credit reporting platform on the blockchain. Whether you’re a net 30 vendor or a business trying to build business credit, you can input all your business transactions in Factiiv and easily generate a business credit report.
The best thing is – there are no errors! And this is all thanks to the blockchain technology that powers Factiiv.
Go visit Factiiv’s website and learn exactly how the platform is working and how you can build your business credit by leveraging the power of blockchain technology!
Open your net 30 vendor account with The Red Spectrum
You’re looking for a superior financing option to get your business started? We’ve got you covered. Opening a net 30 vendor account with The Red Spectrum is extremely easy.
All you need to do is – complete your first purchase!
By the moment you’ve finished your first purchase, you’ll need to enter your basic company information. Once you’ve done that, your net 30 vendor account will go through a quick verification process – and you’re good to go in a few moments.
A $3500 credit limit will await you when you open a net 30 vendor account with us. And for every single purchase, you’ll get a $1500 credit limit.
We encourage you to take the first step towards building your business credit and using all the business credit hacks you’ve learned today! Whatever kind of help you need – we’re always happy to help! Feel free to contact us and let’s start building your business credit today.
