Stick Like Glue Radio #186 On this special episode of Stick Like Glue Radio, I interview business credit expert, Ty Crandall. Ty is the author of Perfect Credit and Business Credit Decoded. Don’t miss this powerful show!

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On this special episode of Stick Like Glue Radio, I interview business credit expert, Ty Crandall. Ty is the author of Perfect Credit and Business Credit Decoded. Don’t miss this powerful show!

Main Questions Asked:

  • What is business credit, and how should entrepreneurs think about it?
  • Is it possible for a business to get credit without a personal credit check?
  • What is tied to your EIN profile?
  • Are the credit bureaus in the consumer world the same as in the business world?
  • If you are a sole proprietor, are you still tied to your social security number?
  • How does business credit scoring work?
  • How does someone go about getting their credit repaired?
  • What is FICO?
  • Why type of businesses should have business credit?
  • How does a business start a profile and score?
  • How fast can a business expect to have a credit profile?

Key Lessons Learned:

Consumer Credit

  • 74% of people will go to family and friends for startup business funds and use their own personal credit.
  • Consumer credit wasn’t designed to start a business, so the limits are significantly less than what you will find with business credit.
  • 30% of your consumer credit score is based on utilization.

Business Credit

  • When you go to get a bank loan or credit line, they will pull your personal credit if you provide your social security number, but they are also pulling your EIN number.
  • Business credit is fundamentally a credit profile linked to your EIN number.

Don’t Use Your Social Security Number  

  • You’ll never get an application that doesn’t ask for your social security number. If you are willing to personally guarantee your debt, they won’t stop you.
  • You don’t need to provide your social security number.
  • If you leave your social off the application, you are forcing them to use your EIN.
  • By not supplying your social security number means you aren’t personally guaranteeing.

How to Build Your Business Credit

  • The reason Apple and Walmart have $100M credit lines is that they have established deep credit profiles.
  • Any business can establish a credit score for their business and use that to qualify for credit.
  • If a credit card isn’t willing to approve you solely on your EIN, then you need to accept that you will be providing a personal guarantee and credit check.

Choosing an Entity

  • By default, certain entities make you personally liable.
  • In a sole proprietor or partnership, you are the business.
  • Choosing a corporation or LLC means you are not personally liable for what takes place within the business.

Business Credit Scoring

  • The PayDex score is only based on how you pay.
  • If you pay your bills on time or early, then you get a good score.
  • Bad scores depend on how late you pay.
  • It’s possible to get a good score in 60 days and $2-5K limits at Amazon and Office Depot.

Repairing Credit

  • Credit reports should be reviewed at least once each year.
  • Any negative information should be disputed to ensure they meet the requirements for accuracy, timeliness, and that it’s verifiable.

FICO

  • This is a company that issues credit scores.
  • The company deals with algorithms that take data of an individual and creates a score that determines your risk of default.

Business Credit to Help You Grow

  • The biggest companies have mastered using other people’s money to grow, and understand the benefits.
  • When you get to the point where you need a credit line, if you don’t have business credit established, your chance of getting approved is lower.
  • Get business credit from the start of your business and don’t be personally liable.

Getting Started

1. Recognize you are applying for credit with no social security number.
2. Have a business address or get one.
3. Have your professional website, email, cell phone details.
4. Find vendors that: i) report to the business credit reporting agencies and ii) will give you credit even if you have none such as Uline and Quill.
5. When you get 5 vendor accounts, start getting store accounts.
6. When you get 10 total accounts, you can start approaching Costco and Home Depot to get their commercial cards.

  • It takes about a week to set up the creditability, 60 days to set up the store credit, and about 120 days total to get cash credit.

Resources:

Ty Crandall
Free Download
Credit Suite
Perfect Credit (book)
Business Credit Decoded (book)
Creditreport.com 
Regus
 
Click to Tweet:

What are the steps to building a business credit profile and score? Find out w/ @TyCrandalltt @newsletterguru https://www.getjimpalmer.com

What is the biggest mistake business owners make with business credit? Find out w/ @TyCrandalltt @newsletterguru https://www.getjimpalmer.com

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