Trade references — an all-too often overlooked secret to business credit success

Trade references are a type of credit reference that allows other companies to verify your payment history.

You’re probably already familiar with the concept of using a reference. For example, when you apply for a job and list a former boss or manager, or you’re filling out a rental application form that asks to contact your former landlord. 

You may be less familiar with references in the context of credit. That’s because in the world of personal credit, credit reports and credit scores usually serve that purpose. A bank or credit union reviewing your application for a loan or credit card isn’t likely to ask you for references: It will just check your credit. 

Business credit is a little different. Many companies that let small businesses buy on credit don’t report the payment histories to business credit bureaus. As a result, lenders or vendors may ask for trade references to fill in the gaps before extending credit. 

Here’s how trade references work, and how to leverage these referrals as you establish business credit.

What is a trade reference?

A trade reference is a statement from a vendor or supplier that describes your payment history with them. You can think of trade references as a financial resume for your business. 

When a small business applies for credit, other vendors and even some lenders may request several references they can reach out to directly to verify your business has a history of paying bills on time. These references typically come from suppliers, vendors, or other businesses that extend payment terms. 

Pro tip: The word tradelines is usually used to describe accounts that regularly report payment history to credit bureaus, while the term trade references usually refers to references that are submitted to creditors and verified manually. These terms are sometimes used interchangeably. 

Unlike automated data that flows into credit reports from lenders, usually on a monthly basis, trade references typically require a lender or supplier to verify the information with the source. Still, they can be helpful in establishing creditworthiness, especially for businesses without a strong business credit history.

While many suppliers and vendors don’t report to business credit on a regular basis, they often will provide a trade reference when asked. This gives you a way to help demonstrate creditworthiness even with suppliers who don't share payment history with business credit bureaus Experian, Equifax, or Dun & Bradstreet (D&B).

Companies that request these references will often contact those sources to verify account details and payment history. Strong references from vendors you've paid on time may help you get new supplier accounts or even some small business loans. 

Why are trade references important?

A trade reference can help open doors to new financing opportunities. 

For startups and businesses with limited credit histories, trade references can be the deciding factor in approval decisions. When your credit file is thin, these vendor statements can help prove you can handle credit responsibly, even if it doesn't show up in traditional business credit reports.

Trade references can offer:

• Verification of payment history not available in credit reports.
• Context about seasonal patterns or business relationships.
• Credibility for startups or smaller firms with limited credit history.

How trade references work

The process for getting and leveraging trade references is fairly straightforward. 

1. Supplier or vendor extends credit terms. You establish a relationship with a vendor who agrees to invoice you rather than requiring immediate payment. Common terms include net-15 (payment due in 15 days) or net-30 (payment due in 30 days).
2. You make payments. Each time you pay an invoice — whether early, on time, or late — that becomes part of your payment history with that vendor.
3. Vendor tracks your payment patterns. The supplier maintains records of factors such as how long you've been a customer, your typical payment timing, your credit limit, and any late payments.
4. You list the vendor as a trade reference. When applying for a loan or credit, you provide the vendor's contact information on your application when requested. (Not all lenders or vendors will request or accept trade references that require verification.)
5. Lenders contact the vendor for verification. Banks reach out by phone or written request to ask about your account history, payment patterns, and creditworthiness.
6. Request trade references be added to credit reports. There are a few (paid) services that allow you to submit documentation of bills you’re paying so they can be verified and added to your credit reports. We’ll share more information below.
7. Confirm addition. If you use a service that allows you to submit trade references to be considered for addition to your credit report, follow up in 30 to 60 days to confirm it has been added. 

The key difference between trade references and standard credit reporting is automation. Credit card companies and major lenders automatically feed payment data to commercial credit bureaus or to the Small Business Financial Exchange (SBFE) which then makes that information available to credit bureau partners.

Which companies or people can be trade references?

Good trade reference sources include suppliers and vendors you pay on time, even when you could theoretically delay payment without immediate consequences. 

Businesses outside your industry can serve as excellent references. A restaurant owner might list a commercial kitchen equipment supplier, a food distributor, and a commercial cleaning service. A retail store could reference inventory wholesalers, fixture suppliers, or packaging companies.

Companies you must pay immediately typically may not be considered strong trade references. Rent and utilities often fall into this category — most businesses prioritize these payments because the consequences of non-payment are immediate (eviction, shut-off). Since nearly everyone pays these on time, they don't differentiate your business as a credit risk.

Primary references may carry the most weight. These are direct suppliers of goods or services essential to your business operations — raw materials, inventory, equipment, or core services you use regularly. Lenders often value these because they represent significant business relationships.

Secondary references include subcontractors or service providers who might agree to delayed payment until you receive payment from your clients. They can also be helpful. 

When selecting trade references, choose vendors who:

• Have extended credit terms to you (not just immediate payment).
• Have a payment history with you spanning several months or years.
• Are willing to respond to these requests promptly.

Trade reference examples

Here are some common types and whether they typically report to business credit bureaus:

The vendors most likely to report payment data to business credit bureaus include:

• Business credit card issuers
• Vendors offering net-30 accounts that report
• Services like Nav Prime

The following options may report directly, or through the SBFE. Reporting is voluntary, and there is no guarantee these accounts will improve credit scores. 

• Business credit card issuers
• Major telecommunications companies
• Lenders and financing companies
• Equipment financing companies

For vendors that don’t appear on your credit reports, you may be able to list them on credit applications. Check with the vendor. 

How to add trade references to your business credit file

Business credit bureaus typically prefer to work with vendors and lenders with whom they have established ongoing business relationships. This allows them to make sure account information they report is submitted correctly, and is kept up to date. 

However, a few companies have set up programs where they may accept information that is not reported by a vendor through established systems. 

If you want to build business credit, the best strategy is often to establish accounts with companies that report regularly to major credit bureaus and pay those accounts on time. Lenders may rely on the information in credit reports to help them make credit decisions, and a history of on-time payments may help boost credit scores. 

However, these paid services may be helpful for building business credit with accounts that you are already paying, and that aren’t regularly reporting. 

Dun & Bradstreet Credit Insights

With Dun & Bradstreet Credit Insights “Extended Data - Provide Documentation” feature you can upload regular termed payments, business banking statements or financial statements as a way to potentially impact your business scores and ratings. However, D&B points out on its website that “this information is subject to review, verification, and possible acceptance by Dun & Bradstreet. Most importantly, there is no guarantee that the provided documents will be accepted, positively affect, or will not adversely affect your company’s credit file or its credit scores and ratings.”

Learn more about Dun & Bradstreet Credit Insights here. 

eCredable Business Lift

An eCredable Business subscription will be reported Dun & Bradstreet, Equifax Business, and Experian Business.

It can also report eligible utilities, phone, internet, net-30, insurance, and services to Equifax Business (monthly), and report eligible business credit cards to Dun & Bradstreet.

Learn more about eCredable Business Lift here. 

Common mistakes with trade references

Business owners often miss opportunities to strengthen their business credit profiles by making these errors:

• Assuming all vendors and lenders report automatically. Many suppliers do not report payment data to credit bureaus regularly. If you're not working with companies that report, you may miss out on valuable credit-building opportunities.
• Only working with vendors who must be paid immediately. Rent, utilities, and similar obligations aren’t always considered strong credit references because these are essential expenses that tend to get high priority. Lenders may want to see how you handle payments you could delay but choose not to.
• Missing out on reporting non-traditional suppliers. Many business owners stick to obvious vendors — office supplies or inventory wholesalers — while ignoring other relationships. Marketing agencies, professional services, equipment lessors, and specialty suppliers may serve as excellent references if they extend credit terms.
• Failing to maintain records. You may want to independently keep records of your payment history in case there are disputes or mistakes. This may also be helpful if you decide to use a third-party service to submit additional references to your credit reports. 
• Not updating references over time. A vendor that provided a credit reference three years ago might offer an even stronger one now. You may also be able to establish longer repayment periods (net-60 instead of net-30, for example) which can improve your cash flow and provide a valuable trade reference. 
• Using only vendors within your industry. While industry-specific suppliers can be valuable, references from diverse business relationships can be valuable as well. 

The fix for most of these mistakes is simple: Be proactive. Seek out vendors that report to bureaus, request references from those who don't, and always pay on time. 

Trade references vs. other business credit data

Business credit reports can include data from various source:

Source: Nav.com

Building business credit with trade references

Trade references can offer one way to help your business qualify for payment terms and some types of financing, especially when you're starting out or rebuilding credit. 

Your goal should be to build credit with companies that report to business credit bureaus on a regular basis so you can establish a strong business credit history and business credit scores over time. 

Check your business credit reports regularly to verify references appear correctly and to track your progress. With Nav Prime, you can monitor business credit reports from multiple bureaus, see your payment history with trade accounts that report, and identify opportunities to potentially strengthen your credit profile.

Note that while Nav provides tools to monitor credit reports it does not control whether or how trade references appear on reports from D&B, Experian, or Equifax.

Sample trade reference letters

Having the templates you can use to make requesting and providing trade references easier. These templates provide a starting point. Customize them to match your business's tone and needs while keeping the essential questions that lenders want answered.

Always check first with the company that will provide the trade reference: It may already have a form for this type of request. 

Download these templates:

Request for trade reference (from a business seeking credit)

When you need a vendor to provide a trade reference for your business, use this letter:

From:
[Your name]
[Your business name]
[Your address]

Date: [Current date]

To:
[Vendor contact name]
[Vendor company]
[Vendor address]

Dear Sir/Madam:

Re: Trade reference for [your company]

It has been [your company name]'s pleasure to conduct business with you for [number] years/months. Our business is applying for additional credit, and I hope to be able to cite your name as a reference. 

If so, can you please answer the following questions:

How long has [your company] traded with you? ___________________________
What are your terms of payment? _______________ days
Does [your company] generally pay within the time required? YES / NO
Would you consider [your company] to be a good credit risk? YES / NO

Please add any other comments you feel are relevant below: 

Thank you in advance for your assistance.

[Signature]

[Name] [Title] 

[Your Business]

Trade reference letter (from vendor about a customer)

When providing a trade reference for a business you've worked with, you may want to use this format:

From:
[Your name]
[Your business]

[Your address]

Date: [Current date]

To:

[Requesting party name]

[Requesting party address]

Subject: Trade reference for [company name]

Dear Sir/Madam:

Thank you for requesting a trade reference. We have done business with [company name] for [amount of time]. Our terms of payment with them are [number] days.

[Company name] generally pays / does not pay within the time required. Payment patterns with [company name] are / are not subject to seasonal fluctuations. I would / would not consider the customer to be a good credit risk.

[Optional: Add specific details about credit limit, number of late payments, or other relevant information]

If you have any questions, please feel free to contact me.

[Signature]
[Name]
[Title]
[Business Name]
[Phone number]
[Email]

Request for trade reference (from creditor to vendor)

When you're evaluating whether to extend credit to another business,you may want to use this letter to contact their trade references:

From:
[Your name]
[Your company]
[Your address]

Date: [Current date]

To:
[Vendor contact name]
[Vendor company]
[Vendor address]

Dear Sir/Madam:

Re: [Business name requesting credit]

I have received an application for a credit account from the above named company. Your name has been given as a reference. I would be grateful if you could answer the following questions.

How long has the customer traded with you? ___________________________
What are your terms of payment? _______________ days
Does the customer generally pay within the time required? YES / NO
Would you consider the customer to be a good credit risk? YES / NO

Please add any other comments you feel are relevant below.

Once you have completed this form please return it in the envelope provided.

Thank you for your assistance.

[Signature]
[Name]
For and On Behalf of [Your Business]

Frequently asked questions

Can I add my own trade references to my credit reports?

It’s not usually. Possible to add your own trade references to your credit reports. Credit bureaus usually work with established clients who report customer payments on a regular basis. However, paid services mentioned in this article allow you to submit certain trade payment information for review, verification, and possible inclusion in some business credit reports. Keep in mind that not all credit references will appear on all credit reports.

Do all vendors report trade references?

No, most vendors, suppliers and service providers don't have systems in place to report payment experiences regularly.

However, there's an important distinction: Vendors may not report automatically, but many will provide trade references upon request. 

Vendors most likely to report payment data automatically include business credit card issuers, net-30 vendors that offer credit reporting, and certain financing companies. For everyone else, you'll need to request references manually.

How many trade references do I need for a strong D&B PAYDEX score?

To generate a Dun & Bradstreet PAYDEX^® score, you need a minimum of two tradelines reporting to D&B with at least three total trade experiences. 

For a strong PAYDEX score, you may need more than that, however:

• Five or more trade accounts reporting regularly to D&B
• Consistent early or on-time payments 
• Higher dollar-value transactions, as the PAYDEX score uses dollar-weighting in calculations

Remember that the PAYDEX score measures trade payment performance from vendors and suppliers. Business credit cards, bank loans, and lines of credit that report may contribute to other business credit scores but typically don't typically factor into PAYDEX score calculations. 

What's the difference between a trade reference and a bank reference?

A trade reference comes from vendors or suppliers you buy from regularly and describes how you handle payment terms for goods and services. A bank reference comes from your business bank and describes your account history, average balances, and overall financial standing.

Some credit applications request both types of references. Lenders and vendors may want to see you pay bills on time (trade references) and maintain healthy bank accounts (bank references). Together, they provide a complete picture of your financial behavior.

How quickly do trade references affect business credit scores?

The time will vary for a trade reference to affect your business credit scores depending on the submission method.

For vendors who report automatically: If you establish a new account with a vendor that reports payment data directly to credit bureaus, the account often appears on the credit report  within 30-90 days after you make your first few payments. Once that data is part of your credit file, it may impact your credit scores the next time a credit score is requested. (Remember, reporting is voluntary and not all accounts impact all credit scores.) 

For manually submitted references: When you submit a trade reference through a service expect it to take at least 30 to 90 days before it appears on your credit report. The bureau needs time to verify the information with the vendor before adding it. Once added, it may provide context for lenders but may or may not be part of credit score calculations. 

One of the most effective ways to begin to establish business credit is to get credit with vendors or lenders who report regularly to credit bureaus, make early or on-time payments, and pay on time. 

Do trade references help with loan approval?

Trade references may help with loan approval, especially when your business has a thin credit file. Lenders and financing companies may use trade references to verify your payment history and to help assess risk beyond what your credit reports or credit scores show. They may be helpful for:

• Startups and new businesses 
• Businesses with seasonal cash flow 
• Companies recovering from past credit issues
• Businesses with thin credit files
• Applications requiring manual underwriting