Completing The Applications
About This Lesson
In this lesson, we’re going to cover the following:
- Steps in Completing Tier 2 Application
- Tips For Choosing Vendors
Resources
Tier 2 Credit Building Checklist
Full Video Transcript
All right. Welcome to this module for tier two, completing the applications. I want you to have a clear future, so here’s what we’re going to cover. So number one, the steps and completing tier two applications, then number two, choosing those vendors of those tips. So, number one, we want to make sure we check our D&B report before applying. Okay. We can do so with nav.com and before applying for any type of credit, we want to check to make sure we have a minimum, minimum three to five trade lines reporting on our Dun & Bradstreet profile. Once three trade lines are reporting for three cycles, basically 90 days each you should have an 80 Paydex score issued, and that’s what most lenders want to use and see in order to justify lending you money or lending you credit cause net technically lending you money, and then you credit.
Now there are a few introductory retail credit cards that only require three established trade lines and do not require Paydex scores. So we’ll start there and then you’ll want to check with the other two credit bureaus as well from time to time to see if they’re developing. But don’t worry if they’re a little bit behind, like I was saying before, Equifax is less, they just drag their feet. But usually at this point, especially Equifax that I’m saying they are going to be dragging their feet, but the other ones are going to be fine. And you can view this by looking at your NAV profile, which by the way, is an actual vendor, a tier one vendor. Now, when you pick your second tier vendors, I’m going to break. I’m going to highly recommend this, from completing applications. Do not give your social security number or personal guarantee on these applications for this credit at this stage.
It is not necessary for two tier tier two accounts. Many applications will ask for it. You can just leave that field blank. And if your social security number is absolutely required on the application, then you’re applying for the wrong type of credit line. So you want to maybe transition to another credit line with that company that does not require your social security number. Now, if you do give your social security number, the lender is going to be using your person, you as an individual, not your company as a co-signer on the credit line and evaluating your credit, where that is based on your personal credit, which is what we want to avoid, especially at this point for tier two accounts specifically. And that’s going to make you personally, you know, responsible for the debt, and then you gotta be commingling your business and your personal credit, which is what we want to avoid.
So we want to build up a strong credit history on the business side with these accounts first, especially with these tier accounts. And at this stage is very important that you are not considered as a personal guarantee for your business, but later on with like third or fourth tier, it’s probably still not advisable when you start getting to that five, 5th tier or 6th tier or 7th tier, it’d be fine because you’re actually getting cash credit. Okay. So, just a couple of tips. So we’re going to provide that vendor list for you to use, but you want to make sure before applying that you check carefully to understand what their retail cards are going to look like, and then do your best to present your company or do your best to be sure your company is in its present state of credit worthiness to meet the guidelines.
So essentially what I’m saying is it’s making sure your credit score is in a good place and you have everything in order, right? If you don’t have a Paydex score yet your first cards then you need to apply for were not require a Paydex score, right? So there’s going to be, there’s going to be cards and you can, you can look at this that doesn’t require a Paydex score. Then there’s going to be ones that do require a Paydex score. So what you want to do is make sure that you know that you’re applying for that now at this stage, you may get declined for applications. And if that’s, if you do, it’s, it’s fine. Just apply for another one. I’m going to provide a large list of applications or vendors to apply for. So even if you’re declined, it’s totally fine, right?
It’s always, you know, ideal to get lenders or vendors. They’re going to report to all three bureaus to look for the ones that do. Now, if they report to just two, that’s fine. If they report to only one, the one you absolutely want it to be reporting to is Dun and Bradstreet, right. And be sure to acquire credit cards that you will actually use, work with vendors that you’ll actually use. Ideally. But if you can’t just make sure if you go through and do business with one of those vendors, that you can get some, some something out of the deal, okay. And you want to make at least a hundred dollars in purchases for the first purchase with these accounts to report payment experiences initially then about $50 minimum after that. You’re going to need these accounts every month to report so only make a payment once per month on all of these accounts and payments are going to need to be paid on time or early.
Again, it’s so critical to have excellent credit that you pay your bills on time, which is why I’m saying, as you’re building up your credit, you want to have that money set aside, in order to do so. And these are going to be again, look at the vendors. If there’s stuff that you’re already buying now in your household or for your business, just appropriate it to this. And if it happens to be more expensive here then you get another vendor who cares, you’re doing this to build up your credit. So don’t send us an email. Well, I want you to do it, but it was more expensive. Okay. Well, it’s not a big deal. You’re doing this to get, get, get the credit. Okay. So you can get that history. All right. So get this knocked out. These are the tips I want you to have, and I’ll see you in the next module.