Business Credit Reporting and Strategies - the FWF way

What can we learn from creditboards about business credit?

There is a tremendous amount of information about business credit at the infamous creditboards, but their goals seem to be different than the typical member of FWF.

The discussion at CB seems to be all about getting business credit without a personal guarantee. Pardon the gross generalization, but I’m assuming this is because many creditboard members have…ummm…less-than-perfect personal credit, so PG-free business credit is the only type of credit available. Also, and again, pardon the generalization, there are many CB members who seem to be hoarding credit for credit’s sake, regardless of profit potential.

In contrast, FWFers (especially the BT investing crowd) are more focused on obtaining credit because it MAKES US MONEY. We typically have excellent personal credit, and we are exploiting it for maximum gain. We are looking to business credit to enhance our arbitrage game and are more than willing to use personal guarantees if necessary.

MikeR397 started an excellent thread extolling the virtues of business credit, but I’d like this thread to be focused on 2 business credit topics: 1) Reporting and 2) Strategies.

Reporting

We all know that business credit is hidden from our personal reports. However, business lines obviously report somewhere. That leads to a lot of questions:

What do we know about the business CRAs?
How do business scores work? (e.g., What’s D&B and how will a paydex score of 80 help me?)
How can we monitor and manage the information our reports contain?
Which lenders pull which report(s) and how do they use these reports to make decisions? Which lenders report lines to which business CRAs?

Strategies

To what extent do which lenders treat personal and business credit as separate buckets?
Can you create multiple business entities to create multiple credit buckets? If so, how can we exploit this? I’ve always assumed everything ties back to your SSN, but perhaps this isn’t the case.
How can we time biz and personal AORs for maximum effectiveness?

I know I’ve asked a bunch of questions without providing many answers. I know a tiny bit about the questions above, and I’ll add in a few things when I get a chance. Regardless, this thread should be a work in progress, and I’m hoping to tap into the collective wisdom of the forum.

Awesome thread, lhendricks92.

I got my chocolate and my laptop and watching .

I recently did a mini business AOR and consolidated some credit. One thing I noticed that I wanted to share with the community was that Chase personal cannot reallocate to a business credit account. Chase business can but is only open 8am to 8pm. (I think EST) If you call outside of those hours, you'll get a personal account rep. The first time I did this the rep simply told me that she couldn't reallocate to my business card and did not clarify that with the fact that if I called during business hours I could get a rep who could.

xxjt said: One thing I noticed that I wanted to share with the community was that Chase personal cannot reallocate to a business credit account.

Yes, they can. I've done it. Read several AOR threads where it has been done.

Just to be clear, I did not say "Chase cannot reallocate credit onto a business line" but _Chase personal_ cannot. You need to talk to the _Chase business_ credit reps, which are only available 8 am to 8 pm EST.

Glad to see this thread Lh

There is so much we don't know about biz credit

I have received 5 or 6 pre-approved business cards but I've never known how they targeted me.

My latest offer is from CitBusiness for a 0%APR until May 09 $50 cap BT (no annual fee) Comes with a "Personal Business Assistant" (?) and $100 in Money-Back Certificates

Small print on the back says: Citibank selected the Business for this offer because the Business met certain criteria of creditworthiness based on its credit record maintained at commercial credit bureaus.

I haven't figured out where CitiBiz reports yet (not EQ Commercial or D&B or Exp)
There is another credit card database at D&B that I haven't figured out how to check yet. It's possible they use that.

As discussed in other threads I have verified that AMEX, Wells Fargo, Advanta, Chase, Home Depot & Lowes all report on EQ Commercial.

I assumed they focus on no PG because they know they'll eventually default. Most people seeking biz credit there are doing so because they blew up their personal credit. The average CB'er goes through a cycle of seeking credit, destroying credit, cleaning up credit, and over again.

They've also screwed up processes for applying for biz credit and even credit reporting due to their reckless abandon and addict-like desire for credit lines. No thanks. I don't need to learn anything from them.

ColbyS said: LaJollaInvestor said: My latest offer is from CitBusiness for a 0%APR until May 09 $50 cap BT (no annual fee) Comes with a "Personal Business Assistant" (?) and $100 in Money-Back Certificates

Small print on the back says: Citibank selected the Business for this offer because the Business met certain criteria of creditworthiness based on its credit record maintained at commercial credit bureaus.

I haven't figured out where CitiBiz reports yet (not EQ Commercial or D&B or Exp)
There is another credit card database at D&B that I haven't figured out how to check yet. It's possible they use that.

I received this offer as well, but want to verify it doesn't report to personal before pulling the trigger. Can anyone verify that it definitely does not report to personal?

Good point-- wish I had thought of that. The "commercial credit bureau" and the fact that it was mailed to my office (not home)
made me assume (usually a bad idea)

Curious if anyone knows for sure.

I have Citi Business w/ TYN and Citi Business Premier Pass and neither shows on my report, except for the inquiries - which got combined into one since I applied the same day. Citi Professional DOES report.

Another aspect I've seen many people overlook with business credit:

Just b/c you have your Chase business credit hidden from your credit report (so you can still get a good BOA line) does NOT necessairly mean that you can get more Chase personal credit. While Chase can't see it on your credit report, they do know (I am pretty sure of this) about how much credit you have on the business side with them. I do know some issuers can't see your business credit when looking at personal, but it seems many can tell. I know Chase and Citi know how many total cards you've applied for regardless. Just another thing to be aware of.

ColbyS said: Tom9999 said: I have Citi Business w/ TYN and Citi Business Premier Pass and neither shows on my report, except for the inquiries - which got combined into one since I applied the same day. Citi Professional DOES report.

Would it be advantageous (i.e. higher CL) with Citi Business if I pay down all my personal Citi cards?

The current offer is really sweet (0% till May 09) so I'm willing to lose the remaining 4-6 months on my (personal) 0% if it will benefit the business line. However, I'd hate to lose it if the benefit is negligible. Can anyone shed some light?Any time you remove debt from your personal cards and put it on the business side, you will help your FICO. Furthermore, I am almost positive that you can do a new BT with Citi at any point in the promo period with teh standard BT fee (sometimes $0, sometimes $50). Food for thought.

atobias said: I assumed they focus on no PG because they know they'll eventually default. Most people seeking biz credit there are doing so because they blew up their personal credit. The average CB'er goes through a cycle of seeking credit, destroying credit, cleaning up credit, and over again.

They've also screwed up processes for applying for biz credit and even credit reporting due to their reckless abandon and addict-like desire for credit lines. No thanks. I don't need to learn anything from them.

Now that's a mind with the door shut firmly.

Okay, this borders on the obvious, but you can check to see if an Experian Business report on you exists by searching here:

http://www.smartbusinessreports.com/?link=5002a&offercode=textfaq

As far as I can see, unless you are denied business credit based on the report or subscribe to their service to be able to regularly check the reports of others, it costs you $45 to see your own report. Must be no FCRA provision for a free annual report.

Likewise, D&B lets you search here:
http://smallbusiness.dnb.com/webapp/wcs/stores/servlet/SmbHome?storeId=10001

I had an Experian report but no D&B (so I don't know what purchase options pop up if you get a hit). I operate as a sole proprietor (consultant).

Cheers,

--VanceWade

Here's a snippet from the the payment section of my company's D&B file, but I have no idea what it means:

Paydex is at 80.

Below is an overview of the company's dollar-weighted payments, segmented by
its suppliers' primary industries:

                                   TOTAL     LARGEST    %       DAYS SLOW
                       TOTAL      DOLLAR       HIGH    W/IN
                       RCV'D      AMOUNTS     CREDIT  TERMS <31 31-60 61-90 91+
                       ----- -------------- ---------- ---- --- ----- ----- ---

                          #          $          $        %   %    %     %    %
Total in D&B's file        4            450        250
Payment By Industry:
 1 Insurance agent         3            350        250  100   -     -     -   -
 2 Executive office        1            100        100  100   -     -     -   -

Can anyone interpret this?

I see at least 2 recent threads about creating using multiple businesses to create multiple credit identities.

win333's AOR thread
Venturion's most recent A0R thread

This strategy could have tremendous profit potential. Do others in this forum have experiences to share?

althes said: D&B and Experian Biz is very important for any biz.
I have a US bank business card and I got it with no hard pull on personal because I had a paydex score on D&B and a EXP Biz score of 85.
It is very important also for securing BLOC. Banks want a well rounded business file.
I have received Home Depot Store Cards and Home Depot Bus MC with no pp.
I also received Keybank Biz MC and a couple Chase cards that asked for my TIN with no pp.
I have also been able to get increases on Biz cards due to having a strong D&B and ex biz file.

Bingo, but you won't learn this on creditboards. They think Fatwallet is a bunch of DumbA$$es ruining their credit with INQs.

There method will get the credit reports started, but it takes the Fatwallet app spree to make it work to it's fullest. I'd take Fatwallet anyday.

MikeR397 said: One thing I'll add (and I'll update my other business thread as well) is that it appears the companies are not being so generous with the 0 years in business/$0 revenue Sole Prop anymore. I'm only basing this on my roomates very recent experience of getting denied from all business cards so far (few pending) b/c "Unable to verify business." This is with 810 FICO and $200+ HHI.

This occured 6 months after I was able to get $100k plus for my mom with $0 revenue and 0 years in business with the same cards.. (see quick summary). Perhaps it is another credit crunch change.

For myself, I put 2 years in business with about $1k in eBay sales (which is accurate), and was able to get about $50k of business credit. I attribute my lower amount due to my short and limited individual credit history, which is why I strongly believe(d) that busienss credit is still heavily reliant on your personal credit reports, maybe more so than your business reports. This seems to maybe be changing now.

Good post lhendricks, I'll be watching when I can squeeze in some FWF time away from the studies.

When you have biz credit reports, then they believe you are a business!!! Thats the KEY, I've gotten about 150,000 in new biz credit in the last 3 months with high 600's scores. But now my credit is perfect and I don't get that UNABLE TO VERIFY BUSINESS message anymore.

I had 1 tradeline on EQ biz 2 months ago and now some of my old biz cards are reporting there! I have 13 tradelines reporting now, At some point I think you will not need a personal score if your business reports look good enough.

lhendricks92 said: Here's a snippet from the the payment section of my company's D&B file, but I have no idea what it means:

Paydex is at 80.

Below is an overview of the company's dollar-weighted payments, segmented by
its suppliers' primary industries:

                                   TOTAL     LARGEST    %       DAYS SLOW
                       TOTAL      DOLLAR       HIGH    W/IN
                       RCV'D      AMOUNTS     CREDIT  TERMS <31 31-60 61-90 91+
                       ----- -------------- ---------- ---- --- ----- ----- ---

                          #          $          $        %   %    %     %    %
Total in D&B's file        4            450        250
Payment By Industry:
 1 Insurance agent         3            350        250  100   -     -     -   -
 2 Executive office        1            100        100  100   -     -     -   -

Only you can really figure out who is reporting, it's a big freakin secret! But go and apply for a Dell biz account and see what happens. They may give you 25,000 just because you have tradelines.

Conoco didn't even ask REV or INCOME and gave me 4,000. Business credit goes by tradelines not as much as income.

win333 said: Only you can really figure out who is reporting, it's a big freakin secret! But go and apply for a Dell biz account and see what happens. They may give you 25,000 just because you have tradelines.

Conoco didn't even ask REV or INCOME and gave me 4,000. Business credit goes by tradelines not as much as income.

This is great info win333, but what is the point? How do you make profit from a $25K Dell credit line?

win333 said: Your not making profit from it, your using it to remove any doubt that you are a real business.

If you aren't making a profit, what is the point of getting the credit lines?

Can credit be guaranteed by a entities other than individuals? What I mean is: Can I use a business with good credit history to build the credit of a new business?