Business Credit Application Sequence

And this is going to be the business credit application sequence, i.e like the phases you want to go through from zero to start very similar to the tiers and the also eight rules. But essentially what we want to do is I’m going to cover the business application sequence and the phases and really phase one, phase two, where we start phase three, phase four, phase five, phase six and phase seven, very similar to tiers. So what is phase phase one? So phase one is essentially everything we’ve done to form a creditor compliant company or credit optimized company. So before you can even begin applying, like I’ve already said, and I want to reiterate, if you have not done all the steps in order to have a credit optimized company, you need to make sure you do that stuff, first. And have legitimate business with a legitimate structure before applying.

Okay. So phase one, at this point, if you’re watching this video should already be completed. If you missed any steps, stop and go back and complete those steps first, before moving forward. Now, once you’ve completed phase one, we now can start to do phase two, which is going to be able to create a solid credit foundation with the business credit bureaus. So now is going to be time for us to get those net accounts, those tier one accounts, tier two accounts so that way we can get a Paydex score. Now, once we’ve done that, we’re going to be doing those net 30 accounts. And we also want to make sure we pay our bills before the due date. So if we have a net 30 account, we want to pay it by the 15th, or the 15 days into the net. So that way we can show great credit history and get approved for loans later on down the road without us getting denied.

Also, when we applied for this, we want to make sure the information is reporting based on our accurate data on our credit reporting file. It’s important to make sure that the vendor that’s extending a credit to you, make sure that they’re reporting all that information on your credit file when you set up the account as a receivable. Now, once you’ve done this in that first two phase, so tier one and tier two is going to take about 90 days, 60 to 90 days of making payments on time and making sure that those vendors are actually reporting the information to Dun and Bradstreet, Experian, and in sometimes Equifax along with the payment history. And this is going to be the data that we need in order to get at that Paydex score and put up our initial corporate credit profile and credit report. Now, all of these agreements have an agreement with the credit bureaus and their frequency of their reporting will be somewhat different, but typically it’s monthly.

Some are quarterly, you know, so after you have five trade accounts reporting at the D&B level, now you have established that Paydex score. So now we can move forward and start doing the other type of accounts. So business credit is a lot easier to build up on the front end, but it’s really, really easy to not build it accurately. And you end up, you know, shooting yourself in the foot. Now, once we’ve done that, we can now put ourselves into phase three, strengthening the accounts. So now, we’re gonna make sure we make all of our payments on time or even early to strengthen our accounts, to strengthen our Paydex score. Remember making that Paydex score, making the payments with by the net 30 days is going to give us an 80, but if we make him earlier, we’ll be able to get 90 or even a hundred, right?

And we want to make sure we have this history so we can get established for those retail credit cards at those specific stores. Now, once we have that in phase four, we want to start enhancing our current credit line. So in this phase, you want to show you, we basically wouldn’t be requesting those limit increases with our existing accounts that we already have while still following the tiers of credit that I’ve broken down in the previous module. So we still want to be applying for those tiers, but then as we’re making our payments on time and making our bills on time, we can, we can go back to those existing vendors and request a limit increase, right? And, those limit increases are going to help us because it’s going to report on our, on our, on our actual reports. And then the other creditors will be more likely to give larger limits because they see that we’ve already been approved for a larger limit.

Then in phase five, that’s when we start getting those revolving credit. So this is where you’re going to be tapping into the secured revolving credit lines and doing your best to get those corporate credit cards. And then phase six, part two, at this phase, you have a great credit profile, and now you can get those higher limits, unsecured cash and credit cards because you now have in that phase six, place. And then in, sometimes in phase seven, if you want to get the actual cash credit and complete the core building process, this is where you’re going to be at. And in some scenarios like even with the Tahoe I recently got, like some of the cars I did personally guarantee I’m on the front end, but had I followed this process, I would not have had to. So, but I’m also saying if you know, you’re going to make your bills on time and you know, you’re going to build up their credit and you need, and you’re going to make good on it.

It’s totally fine to PG because I rather you PG get the credit show some good established history, follow this process to make sure you have 23, 24, 25 tiers of credit reporting on your Dun and Bradstreet and your Experian report collectively, then say, Hey, look, I want to remove myself as a personal guarantee because I’ve got strong cash flow. I have strong trade references. I’ve demonstrated that my company can pay its bills on time.I no longer want to be responsible for this on my personal credit. I want to keep it completely separate. Okay. So this is the application sequence. I’m so, so excited for you. I’ll see you in the next module, tier one, where we’re going to start applying for those pre-Paydex accounts.