Lesson 20 of 25
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Tier 1: Vendor Accounts

 ⏳ Video Length — 00:11:15

Lesson Summary

While building business credit is much like building personal credit, it’s not as straightforward. This is because not every business account you apply for will report to your business credit reports and help you grow your business credit scores. This is why it’s so important to apply for accounts that report to Equifax, Duns and Bradstreet, or Experian. Otherwise, you won’t be any closer to building great business credit, and this can feel like a waste of time.

To get you started with building business credit, we’re going to start at the starter business credit accounts — called vendor accounts. These accounts are simple to use, and help you grow your business credit scores no matter how new you are in business or if you have challenged personal credit.

What is a Vendor Account

  • A vendor credit line is when a company (supplier/vendor) extends a line of credit to your business on “Net 15, 30, 60 or 90” day terms. ​
  • With vendor credit, your company can purchase their products or services up to a maximum dollar limit and you have 15, 30, 60 or 90 days to pay the invoice in full.​
  • Some vendors will approve your business for Net 30 payment terms upon verifying that your company simply have an EIN number and a 411 listing.

How to Get Approved for a Vendor Account

Always apply for vendor based credit without using your social security number. Although some vendors may require it and even tell you that they need to have it. Submit your credit application without it.​

Some vendors may require an initial prepaid order before they can extend a line of credit to your business.​

When your first Net 30 account reports to agencies such as Dun & Bradstreet then your report will reflect that new trade line. ​

For Experian Business and Equifax Small Business this will automatically activate a company credit file if one is not yet established.​

Things To Know

  • Your score is calculated by how fast (or slow) you pay your accounts back.​
  • It’s always best to pay your Net 30 accounts 10+ days ahead of the due date. ​
  • Paying better than terms will help your business achieve a 90-100 Paydex® Score.
  • Only open accounts with companies you will use and pay consistently.