Business tradelines: what they can do for your business credit

If you’re trying to establish business credit, you’ll likely come across the term “tradelines.” They can one of the top tools for building business credit quickly, even if you don’t have good personal credit.

How do tradelines work, and what’s the best way to use them to establish business credit? We’ll answer both questions here and give you the tools you need to build credit with tradelines. 

What is a business tradeline?

A business tradeline is a credit account between a business and vendor. Typically, a supplier or vendor will offer the business payment terms such as net-30, which means the business can pay for purchases in 30 days, rather than upfront.

Net-30 accounts can improve the cash flow of the business since goods or services don’t have to be paid for upfront. 

Business vs. consumer tradelines

The key difference between business and consumer tradelines is which credit bureaus get the information:

• Business tradelines report to commercial credit bureaus (Experian Business, Dun & Bradstreet, Equifax Small Business) and can affect your business credit scores
• Consumer tradelines report to personal credit bureaus (Experian, Equifax, TransUnion) and can affect your personal credit scores

What you should know about business tradelines 

Business tradelines can be a valuable tool when it comes to preparing your business for financing.

In a nutshell: 

How tradelines help build business credit

Payment history is the top factor that impacts credit scores. Accounts that are paid on time are a top factor in building business and personal credit.  Without this information, it’s very hard to calculate a credit score. 

Many suppliers and vendors offer payment terms to their business customers. Net-30 terms lets business pay in 30 days, for example, while net-55 terms gives the business 55 days to pay the invoice. 

When a business gets credit through a vendor, pays on time, and the account is reported to their business credit report(s), that tradeline can help build business credit. 

Of course, on-time payments are key here. Late payments can hurt the business's credit scores.

Score weighting by bureau

Experian Intelliscore Plus weighting

The Experian Intelliscore Plus^sm score is Experian’s business credit score. 

There are currently three versions:

• Intelliscore Plus (original 1—100 scale)
• Intelliscore Plus V2 (1—100 scale)
• Intelliscore Plus V3 (300—850 scale)

This score can evaluate over 800 data points, but these top factors drive most scores: 

• Trade experiences/payment history is the most significant category and reflects your company's payment history with its vendors and suppliers. The model analyzes the number of trade experiences, outstanding balances, payment habits (such as Days Beyond Terms or DBT), credit utilization, and payment trends over time.
• Public records include major red flags like collections, tax liens, judgments, and bankruptcies that can significantly damage your score. 
• Credit utilization examines how much of your available credit you're using. Credit lines with high balances can be a sign of risk. The system also compares delinquent account balances against your total credit limits to gauge overall financial health.
• Company demographics (firmographics) is background information about the company itself. Factors such as the number of years the business has been in operation, the number of employees, and the industry classification (via SIC or NAICS codes) may be considered. Some industries are inherently considered more riskier than others, which can affect the baseline score.

Learn more: The Experian Intelliscore Plus credit score explained: definition, ranges, & how to improve.

D&B PAYDEX and dollar-weighted invoices

The D&B PAYDEX^® score runs from one to 100, with 100 being the best possible score. 

• You need at least two active tradelines with three payment experiences reported to get a PAYDEX^® score. 
• PAYDEX^® uses two main factors to calculate your score: recent payments matter more than old ones, and bigger transactions carry more weight than smaller ones. This means if you pay a $10,000 invoice on time this month, it impacts your score more than a $500 payment from six months ago. This approach gives lenders a real-time view of how you handle major financial commitments.

Learn more: Dun & Bradstreet PAYDEX® Score: What is it & how to improve yours.

Types of business tradelines

You'll likely come across terms used to describe different types of tradelines. Here's what they mean.

Primary tradelines

Primary tradelines are those you obtain as a consumer or business owner yourself. In other words, you apply for credit, are approved and the account reports. This is the most basic way to build credit, whether you're trying to establish business credit or personal credit.

Secondary tradelines

Secondary tradelines, also known as authorized user tradelines or "piggybacking" are accounts where you're added to someone else's account. These are not typically used in the context of business credit, but are somewhat popular in consumer credit.

Seasoned tradelines

Seasoned tradelines are accounts that have been opened for some time, often a year or more. These are popularized by certain types of credit repair organizations that may sell access to tradelines. Since older accounts can help build credit scores, some individuals see these as a shortcut to building credit, though they are not without risk.

Tier 1 vendors

Tier 1 vendors is a term that’s often used to describe vendor or supplier accounts that are easy to get, even if the business doesn’t have an established business credit history. Tier 2 vendors often require applicant’s business credit reports list at least 3-5 accounts reported with a good payment history. (Each vendor has its own credit requirements.)

Net-55

You may see references to net-55 tradelines for building business credit. Most vendors or suppliers will not directly offer payment terms that allow the business to pay in 55 days.

Instead, it usually refers to a strategy where the business owner gets revolving credit accounts that report (like fuel cards or business retail cards) and then time their payments to give them up to 55 days to pay.

Installment loans & equipment leases

Installment loans and equipment leases may help build business credit.

Here are some key pros and cons: 

Tradelines vs. business loans

Small business loans can be a great way to build business credit. If the loan or line of credit is reported to business credit reporting agencies (many are), it can provide another tradeline.

Pros and cons of tradelines vs. business loans

When to use tradelines vs. loans

Here’s one way to think about tradelines versus business loans for credit building.

• Loans can be a good choice when your business needs to borrow. One exception is a line of credit. It can be helpful to secure a line of credit for needs that come up quickly or unexpectedly, and you only pay interest on the amount you borrow. 
• Tradelines can be used to build credit whether or not your business needs a loan. Pay in full by the due date and you’ll typically avoid interest, depending on the provider’s terms. 

How do I get a tradeline for my business? 

Establishing business credit is often a confusing process because not all lenders and vendors report to all major business credit reporting agencies. For example, information about a supplier account may appear on your Experian credit report, while information about business credit cards is often shared with lenders via the Small Business Financial Exchange (SBFE).

One great way to establish tradelines is to simply ask. Ask your suppliers or vendors if they offer credit or payment terms. There may be a basic credit check involved, but most don’t require good credit and will rarely check a FICO score. 

If you aren’t yet doing business with suppliers or vendors that report to commercial credit bureaus, you can seek out vendors that report. Purchase items your business needs (such as office supplies) then pay on time.  

Get tradeline reporting with Nav Prime from your monthly payment. The tradeline is sent to the major business credit bureaus, which builds business credit history.

How many tradelines should a business have? 

It's generally recommended for businesses to have two to three tradelines to build business credit.

Payment history helps lenders understand how borrowers have handled credit in the past. A business credit report that lacks tradelines or other credit references makes it difficult for lenders to assess the creditworthiness of the business and how it is likely to pay in the future. 

There is no perfect number of tradelines, but if your goal is to build business credit, you will probably want to make sure your business credit report lists at least two to three accounts reporting to business credit bureaus. The PAYDEX® score produced by Dun & Bradstreet, for example, requires two tradelines with at least three “credit experiences” to calculate a score.

A credit experience is when credit is extended and paid off. You don’t have to use those accounts each month, but keeping them active by making purchases (and paying on time) can be helpful for establishing good business credit. 

Is one business tradeline enough?

Having just one business tradeline may be enough in certain situations, particularly if your business is new or if you’re managing a very small operation with minimal credit needs.

If the single tradeline is in good standing and reflects positively on your credit history, it can still provide a foundation for future credit opportunities. However, relying solely on one tradeline could limit your ability to demonstrate a diverse credit history, potentially affecting your ability to secure larger loans or credit lines in the future.

On the other hand, having multiple business tradelines can offer several advantages:

1. More history: It demonstrates to lenders that your business has a history of managing credit responsibly and can handle various types of financial obligations.
2. Better mix: This diversity in credit sources can also help mitigate risks associated with relying on a single creditor.
3. Potential to improve your score: Having multiple tradelines may improve your business credit score over time, potentially leading to better terms and opportunities for financing as your business grows.

Ultimately, the decision to have one or multiple business tradelines depends on your business’s financial strategy and credit needs.

Some types of business financing also report to business credit; many business loans, business lines of credit, business credit cards and other types of financing can help establish a business credit profile. 

Before you begin establishing business credit, create the foundation for your business, including details such as getting a business license, getting a business phone number and requesting your D-U-N-S® Number.

Timeline: How fast will a new tradeline raise your score?

It is possible to establish business credit fairly quickly by obtaining tradelines and making payments on time.

For example: Some customers who used Nav Prime for tradeline reporting saw a 26 average point increase¹ across business credit bureaus after 3 months as a Nav Prime member.

But credit building in general takes time. Be aware there are some limitations you’ll encounter. Here’s the normal process for reporting tradelines: 

• Days 1–9: Secure at least two tradelines that report to business credit bureaus, make purchases, and pay before the due date
• Days 10–90: Vendors report first invoices to business credit bureaus  
• Days 90–120: PAYDEX score appears when 3 experiences post to the credit report; other credit scores often generate within this time period as well
• Days 120+: Continue to pay on time to build a credit history. Add new accounts as needed.

It may take 30 to 60 days or even a bit longer, for new accounts to appear on your business credit reports for example. New consumer credit accounts (like credit cards, mortgages, or auto loans), typically begin reporting the next time the lender supplies information to the credit bureaus. That usually means you'll see these new accounts within a month or two on your credit reports.

Be patient. If you don't see new accounts on your business credit reports after 2 months, contact the company that offers the tradeline to find out whether there may be issues matching that account with your business information.

Credit scores are complex and different credit scoring models will treat new tradelines differently. Your individual results may vary.

How to maintain tradeline activity

Your business tradelines need to be used to maximize their impact. Maintaining tradeline activity involves actively managing your credit accounts to ensure they remain in good standing and continue positively impacting your credit profile.

Here are some steps to maintain tradeline activity effectively:

1. Make timely payments: Make sure that your payments are on time for all your credit accounts, including loans, credit cards, and lines of credit. Late payments can have a significant negative impact on your credit score and the health of your tradelines.
2. Keep balances low: Aim to keep your credit card balances low relative to your credit limits. High credit utilization can signal financial stress to creditors and may negatively affect your credit score. Strive to pay off balances in full each month if possible.
3. Manage credit reports: You might be surprised how often your credit reports contain wrong information. Regularly review your credit reports from all three major business credit bureaus to check for any errors or inaccuracies. Dispute any discrepancies promptly to ensure your credit information is accurate.
4. Use credit wisely: Avoid opening unnecessary credit accounts or applying for multiple lines of credit within a short period, as this can indicate financial instability to creditors. Be strategic about applying for new credit and only take on debt that you can manage responsibly.
5. Maintain account activity: Even if you’re not actively using a credit account, consider making small purchases periodically to keep the account active and prevent it from being closed due to inactivity. Closing accounts can reduce your available credit and potentially harm your credit score.
6. Communicate with creditors: If you’re facing financial difficulties that may affect your ability to make payments, communicate with your creditors proactively. Many creditors offer assistance programs or flexible payment options that can help you avoid negative consequences such as late fees or credit score damage.

By following these practices, you can effectively maintain tradeline activity and ensure that your credit accounts continue to positively contribute to your overall creditworthiness.

Tradeline pitfalls & scams to avoid

There are several potential pitfalls when it comes to tradelines:

Not all vendors report

It can be difficult to find out exactly which tradelines report to each credit bureau. Business credit reports don’t list the names of companies reporting individual accounts so it can be hard to figure out which one of your accounts reports, and which ones don’t

Seasoned tradelines

Seasoned tradelines are accounts that have been open for a while, usually at least two years. Some companies “sell” seasoned tradelines. Usually this means paying to get added as an authorized user to someone else’s account. 

It can be expensive, and you don't have the same level of control that you do if you establish your own credit tradelines. Also, purchasing seasoned tradelines can pose legal and financial risks and is not recommended for business credit building.

And it usually doesn’t work that well on the business credit side, because your business is not the company getting the account. There is a significant amount you can accomplish without purchasing tradelines from strangers. If you're trying to build business credit, consider vendors that help build business credit or Nav Prime with tradeline reporting. For consumer credit, consider a secured credit card, or a credit builder loan instead. 

Personal guarantees

Some accounts may require personal credit checks and/or personal guarantees (PGs). Younger and smaller businesses can’t always avoid PGs, but make sure you are prepared to pay back the balance if your business can’t. 

High fee brokers

Some companies offer expensive credit packages. Again, there is a lot your business may be able to do on its own. If you need more help, consider Nav Expand with Prime, which includes a dedicated business credit coach. 

How to remove negative tradelines

If you find mistakes on your business credit reports, you’ll need to notify each commercial credit bureau who is reporting the incorrect data about your company.

Here’s how to file disputes with the major commercial credit bureaus: 

• Experian: Follow the instructions here.
• Equifax: Call (888) 407-0359 or email at cust.serv@equifax.com.
• Dun & Bradstreet: Sign up for the free D-U-N-S Profile Manager online service here.

Are business tradelines legal?

Absolutely. But there are some questionable practices associated with something called “seasoned tradelines.” Some companies (including some credit repair firms) offer to sell seasoned tradelines to help business owners establish credit quickly.

Here’s how it works:

A company will establish a corporation and open accounts under that corporate name, with the goal of “flipping” it. It will then sell this “shelf corporation” to another business with the promise that it will immediately have access to thousands of dollars in credit lines. But rarely does this turn out to be what it seems. 

The established credit lines may not be the type of funding the new business needs, and if lenders catch whiff of the new business owner trying to take advantage of this scheme they can quickly shut those accounts down. “It’s usually shady,” says Nav’s co-founder and executive chairman, Levi King. While there may be legitimate reasons for buying a shelf corporation, using one to try to get access to funding your business otherwise would not qualify for is not likely to be one of them.

Adding authorized user tradelines

Both business credit and personal credit are important when it comes to small business loans and financing. Many small business lenders check the owner's personal credit, especially when the business is newer, or doesn't yet have significant revenues or employees. 

The strategy here applies primarily to building personal credit, as it's not commonly available for business credit. 

Process for becoming an authorized user

Ask a friend or family member to add you to one of their credit card accounts as an authorized user. The account holder will contact their card issuer online or by phone to add the authorized user. As an authorized user you do not have to actually use the card yourself. 

When you are added as an authorized user, that account typically then appears on your personal credit reports. It will likely be identified as an authorized user account but it can still help toward building good credit scores, including FICO scores or VantageScore credit scores. 

For example, if your sibling adds you to their credit card account that they have held for five years, you will typically benefit from that entire payment history.

Accounts with a long established payment history, on time payments, and low balances in comparison to the credit limit make up the ideal authorized user tradelines to add to your credit files.

The risk is that any negative information associated with that account will also appear on your credit report and it can be difficult to remove. For example, if your sibling falls behind on payments or if they start carrying a very large balance in comparison to the credit limit (known as a high credit utilization ratio), your credit scores could suffer.

Purchasing authorized user tradelines from strangers comes with risks, and it can be expensive (hundreds or thousands of dollars). 

Combining with other credit-building tactics

You can combine tradelines from suppliers and vendors with other types of credit building to establish good business credit. Each can be part of a strategy to build credit and manage business cash flow.

For example you can use any combination of: 

• Vendor accounts 
• Nav Prime 
• Business credit cards and/or 
• Business loans

Pick the right strategy for the right stage of your business. A startup might have trouble getting a business loan, for example, but may qualify for a business credit card and vendor accounts. A more established business that doesn't have a need for vendor credit may use business credit cards and business loans.

And either type of business can benefit from Nav Prime with detailed credit reports and tradeline reporting.

What’s next?

Improving your business credit is a worthwhile goal. It can open up avenues to better financing for your business, help separate personal and business credit, and give potential lenders a reason not to focus on personal credit scores. Establishing positive tradelines is a crucial step in that process.

To do so, you’ll want to take the following steps:

1. Open a business credit card that will be reported to commercial credit agencies.
2. Establish accounts with lenders and/or vendors who will report to the business credit agencies. 
3. Pay your accounts on time (early is even better) and you may be on your way to establishing a solid business credit rating.

Additional tradeline resources

Tradelines are a popular topic with Nav’s members and readers. The following resources can help you find ways to leverage them to your advantage. 

• Net-30 accounts: Nav’s popular list of easy net-30 accounts that report to business credit
• Tradelines for sale: Learn whether buying tradelines is a good idea or a fake short cut. 
• Vendors that may help build business credit: Choose from this list of 21+ vendors that can help build business credit—most with no credit check. 
• Business tradelines: Get details on what tradelines can do for your business credit. 
• Fast tradelines: Find out how to kick your credit-building efforts into high gear.
• PAYDEX® score: Learn how Dun & Bradstreet’s PAYDEX^C Score uses tradelines. 
• Business credit scores: Get Nav’s comprehensive guide to how business credit scores work, and how to build yours. 
• Business credit monitoring: Learn how and why you should monitor your business credit

Frequently asked questions