tradelines for business funding

11 Dec 2013

Tradelines for business funding

Is it possible to add tradelines in order to obtain business funding? Piggybacking credit using authorized user tradelines has proven itself as a viable credit enhancement technique over the years. People, pursuing their own interest or the interest of their business, have attempted to expand this practice into other areas, such as credit profile numbers, business credit, etc. As discussed below, this might be a useless effort.

Expanding resources until they snap.

Taking advantage of resources, such as boosting credit scores with tradelines, is nothing short of a smart idea for both business and individuals alike. However, when you try to expand these resources into fields in which they don’t belong, it’s equivalent to shoving a round peg into a square hole. In addition to the fact that it doesn’t work, you’ll spend a lot of money, time and energy into a practice that will ultimately redound to your disadvantage. It’s clear adding tradelines to your credit report will boost your score. It’s clear that with higher credit scores, more “credit doors” will open. So, people make the logical leap between the two and assume, incorrectly, that the concepts will apply equally and universally across all areas of funding, including business funding.

The truth about business funding and tradelines.

Unfortunately, you cannot add tradelines to a Dunn & Bradstreet credit file and adding tradelines to your personal credit to get business funding doesn’t work. I suppose there could be certain situations where this would work (in most situations). For example, let’s say the remaining underwriting hurdle is a certain personal credit score. Well, in this case, tradelines might work for you. Ultimately, however, a higher credit score does not necessarily mean you are getting approved for anything, especially business funding. A higher credit score merely increases your chances of an approval and may also provide more favorable borrowing rates.

Final consideration.

If the business model is good, people will throw money at it. If you actually need an influx of cash, you’ve probably done something wrong in the first place (unless you are expanding, etc). Businessmen often put the cart before the horse and think an influx in funding will solve problems; this is rarely the case and it usually makes things worse. If you’ve got your ducks in a row and the only thing you lack is a sufficient credit score, then in that situation, adding tradelines for business funding makes sense.

4 thoughts on “Tradelines for business funding”

  1. I totally understand your point that tradelines won’t report to Dunn and Bradstreet. If I don’t have a D&B score wouldn’t a lender just base it off of my personal scores?

    1. Great question, yes. That’s exactly right. However, if you are trying to get funding exclusively for your business and it doesn’t have a credit score (or file), they will not lend to the business. Comparatively, if you (personally) didn’t have a credit file or a credit score, a lender wouldn’t lend to you (individually). What you are describing is a personal guarantee for business credit. Similar to a parent co-signing for their child, you (the parent) are co-signing for the business (the child). So, you are correct, so long as the circumstances are as described here. Thanks, Andrew!

      Robbie

  2. Hi i want to start up a retail business, i ‘m applying for a 150k no doc unsecured business line of credit. The source i am using said i need tat least two revolving accounts. I have only one. My credit score is 720, i have no inquiries in the last 6 months, utilization ration below 15 percent. everything good,besides having that second revolving account. This lending source also used Vantage. So i would like to ask could i buy a revolving tradeline from you guys and would that complete my qualification for this line of credit i am trying to get.

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