Business tradelines are the most commonly reported items on your credit report. They are critical in determining your business credit score.
Business credit bureaus collate tradeline information about your business credit and use this information to generate a report about your company’s business credit transactions. This information is a deciding factor as to whether you are granted credit and, if so, for what amount.
Different business credit bureaus add different weights to your business activities for tradelines when trying to establish a commercial credit score.
A business tradeline is an activity record for various types of credit that is extended to a business and subsequently reported to a business credit bureau. A tradeline is established on a business’s credit report once they get credit approval. This established tradeline records all business activity associated with the credit account. Thus, it contributes to the business’s credit score.
Tradelines play an important role in boosting business credit. This is because they provide discerning information about how a business has handled credit in the past. Without this information, it is very difficult for business credit bureaus to predict how your business will attend to future credit obligations.
Seasoned tradelines refer to those business accounts that already have an established credit history. These are particularly useful when hoping to boost your business credit score.
Establishing a strong business credit portfolio is a worthy objective for every business owner. Strong business credit opens up opportunities for your business. You can access enhanced financing and help separate your personal and business credit. It also makes your dealings with future creditors easier as they won’t have any reason to focus on your personal credit history.
Primary tradelines are a vital contributor as your business account is the account on the business credit report. In essence, the business that is the primary account holder is listed as such on the business credit report. Primary tradelines illustrate to business credit bureaus that your business line of credit is indeed that of your business.
Adding a primary tradeline is crucial to building up your business credit score. Here are some of the best ways to build up your business credit score:
Business credit scores have a range from 0 to 100. Business credit bureaus classify scores above 75 as excellent. This is where business owners must focus in order to establish strong business credit. The majority of small business owners usually take advantage of vendor tradelines that have a great track record of reporting to business credit bureaus.
One of the major benefits of using primary tradelines to establish a great business credit score is that it doesn’t take particularly long to do so. Many business loans are taken over a short-term period and paid off monthly. This is a great help for businesses whose business account activity is regularly reported to business credit bureaus.
The cost of primary tradelines is dependent on how you obtained them. Primary tradelines can be acquired for free by opening a business credit card or any other type of business credit account. Most businesses opt for this route as this is a business account opened in the name of the business. This is the standard (and most honest) method of adding a primary tradeline.
Some businesses choose to buy primary tradelines to boost their credit score quicker. But, this is a questionable transaction and could be illegal. When a business’s defaulted account goes to collections and gets transferred to a new owner, businesses can buy these accounts.
Although this may be a creative method to get a primary tradeline, it will have its existing credit and payment history attached. This could have negative repercussions if the account has a poor payment record.
Some businesses also buy primary tradelines for a Credit Profile Number or Credit Privacy Number (CPN). The Social Security Administration advises against this. Using a CPN instead of your social security number to apply for credit is fraudulent on a federal level.
Businesses should add primary tradelines for free by applying for and opening them on your own as opposed to buying them. Application processing times for opening a business credit card or account are relatively smooth. Each creditor can advise you of their own turnaround time.
Debie offers an effective platform for business owners to report their eligible payments as tradelines. Many commercial tenants use Debie to easily report their commercial rent payments straight to business credit bureaus.
Debie is a cost-effective and easy-to-use online platform. It allows you to add free tradelines in the form of the commercial rent payments to your business’s credit history. Additionally, it automates this process for a more streamlined and efficient experience.
Businesses can simply sign up with Debie and connect their business bank account to their Debie profile. Then they can start reporting all their eligible business payments as tradelines. This is an effortless way to boost your credit score.
Business owners that want to boost their business credit score must ensure that they submit accurate reports of their primary tradelines to the business credit bureaus.
The best way to add primary tradelines to a business credit report is for these businesses to open accounts in their business name. Then they need to make sure that they are well managed and maintained. This means paying in advance, or on time, and keeping the utilization rate low.