I run a small landscaping LLC and want to build business credit without taking on debt I don't need. I keep seeing advice to get a business credit card and use it for small purchases, but I don't want to borrow just to build credit. Any way to build credit with vendors or other methods that don't involve borrowing?
Business Credit
Building business credit without borrowing money just to build credit
Net 30 vendor accounts are the usual answer. You buy supplies you already need, pay before the due date, and they report to the bureaus. No interest if you pay on time. Just check which vendors actually report to D&B or Experian.
This gets asked every week. Use a business card for stuff you already buy and pay it off weekly. That's not borrowing, that's just routing expenses. The 'don't borrow to build credit' thing is a bit of a myith.
I second net 30s. Uline, Quill, Grainger, etc. Buy a box of gloves, pay the invoice, done. Took me about 6 months to get a Paydex score. Didn't cost me a dime in interest.
Is D&B even worth it anymore? I've heard their paydex is kind of a joke unless you're going for government contracts. Experian business seems more relevant for smaller companies.
^^ depends on your bank. Some lenders still pull D&B. But yeah, Experian's more useful for trade lines these days. Also don't forget to set up a free Nav account to see what's reporting.
One warning: some of those net 30 accounts require a personal guarantee and hard pull. Read the fine print. Grainger didn't pull my personal credit, but Uline did.
Just use a debit card. No debt, no credit building, no stress. Why do you even need business credit if you're not borrowing? Serious question.
Fair question. I want to eventually qualify for a business line of credit for equipment purchases, but I don't want to borrow just to build the score. So net 30s sound like the right path.
Wait, the OP replied again? Usually these threads are one-and-done. Anyway, yeah, net 30s are your best bet. Just don't expect overnight rsults. Takes months.
Also, make sure your business info is consistent everywhere. Same legal name, address, EIN. I had a mismatch and none of my trade lines reported for the first 3 months. Annoying as hell.
Honestly, the 'borrowing to build credit' fear is overblown. If you pay the statement balance in full every month, it's not borrowing. It's just spending. But you do you.
Still don't get why you'd bother. But good kuck with the gloves and invoice thing. Let us know if it actually works.