Many entrepreneurs find the process of building business credit frustrating. It’s not terribly difficult, but it does involve a few steps, the most important of which is to obtain accounts that report to commercial credit agencies. By paying those bills on time (or early) and keeping your debt in check, you can help build strong business credit. But because many small business bills aren’t reported to commercial credit reporting agencies, business owners may find themselves with little credit data on their reports.
But there are new solutions that can help business owners build credit using accounts they already pay, and it’s fast and easy. Here’s how they work.
Nav Tradeline Reporting
Nav now offers tradeline reporting for two of its paid accounts: Business Boost and Business Loan Builder. Both these plans give you full business credit reports and scores from major commercial credit reporting agencies– Dun & Bradstreet, Equifax and Experian— plus a new tradeline with all three bureaus which can help you build business credit faster and track your progress. Nav does not report negative information about these accounts. However, keep in mind that as with any new account, it’s possible to see a credit score drop while payment history is established.
How it Works
Sign up for a Nav Business Boost or Business Loan Builder account, or upgrade your free Nav account to one of those plans. Your Nav account payments reported as a new tradeline to Experian, Dun & Bradstreet and Equifax every month. You’ll also get an alert when your Nav tradeline appears on your credit reports. Your account will likely report as a “business services” account or similar category, depending each bureau’s policy.
eCredable Lift Small Business
You set up an account with eCredable Lift Small Business, which offers a service designed to help business owners build credit using bills they already pay. You can link specific types of bills (see below) to eCredable, which then reports that information to commercial credit reporting agencies. Those accounts, when reported and paid on time, can help build business credit. Currently eCredable Lift Small Business works with commercial credit reporting agencies Creditsafe and Ansonia. It also reports the monthly fee to Dun & Bradstreet as a tradeline.
Linked accounts don’t have to be in the name of the business, however you must attest that you use those accounts in your business. This is helpful for small and/or young businesses (including home-based businesses), that may use their name (instead of the business name) on their accounts.
The types of accounts that may be reported include:
- Mobile or landline phone
- Cable or satellite TV
How Long Does It Take?
While some vendors take 30 – 60 days to report new accounts to business credit agencies, the process with eCredable is fast. “We usually get the data in a few minutes once the account is linked,” says Steve Ely, CEO of eCredable. “We put it in our file and report weekly to the bureaus.”
Even better, up to 24 months of payment history may be included, which can be a tremendous boost for a business that has established accounts. Let’s say you’ve had a cell phone account you use for your business for a couple of years, for example. If you link that account to your eCredable Small Business account, that past payment history (up to 24 months of the most recent payment activity available from the provider’s website) will appear on your Creditsafe and Ansonia commercial credit reports within a week or less.
Business credit reports (check yours for free at Nav) don’t list the names of creditors, and these accounts are no different. Individual accounts will be reported under the category of “business services.” In other words the name of the utility provider, cell phone company etc. will not appear on the report, it will be included in that category.
Learn More: Checking your Business Credit Score with Nav
Is it Safe?
Although business credit reporting is fairly new for eCredable, the company itself has been around since 2009 as a consumer reporting agency. Its mission has been “to help almost 60 million adults who would like to access affordable financial services, but are hindered by their lack of a positive credit history.” As a credit reporting agency, it is required to abide by the federal Fair Credit Reporting Act and maintain standards to help ensure maximum possible accuracy.
Recently it expanded its services to help entrepreneurs build small business credit. “Historically we focused on helping consumers build a credit history from their phone, internet, and utility payment histories,” explains Ely. “Many of these consumers told us they were small business owners and could we help them build better business credit scores too. The technology and user process is very similar, so we spent the last year enhancing our system to meet this critical need.”
How Much Does It Cost?
This service is much more affordable than some credit builder programs that cost hundreds, or even thousands, of dollars. It costs $49.95 to set up an account and then $9.95 a month to maintain it. You can link as many qualifying accounts as you want, as long as they fall into the service categories above and offer online access to the account information.