Developer · Andover, MA · Member since 2008 · 1k+ posts · 489 votes
I applied for a free D&B number the other night and got a call from someone at D&B trying to sell me the D&B Credit Builder and DunsFile. The Credit Builder is a service where you report to D&B what vendors you've paid recently (this could be any vendor - contractors, lumber yard, property manager, etc.). If these vendors do not report in to D&B, someone from D&B will call the vendor so the payment is recorded on my credit file. Without the Credit Builder service, I would have to rely on the vendor to report in, which is not the case for a lot of vendors. I think the DunsFile is just to expedite the completion of my credit profile in a 5 days rather than 30-45 days.
Do most people buy the Credit Builder? He told me it's $69/month and he would waive the upfront fees of $200. After talking to him, he went down to $375 for the year.
If I don't get the Credit Builder, how will I know if my lender and credit cards report to D&B?
Investor · Round Rock, TX · Member since 2010 · 8k+ posts · 4k+ votes
14y
Good luck. Almost all lenders I know require personal guarantees unless your business is doing a LOT of projects and has healthy cash flow. It is good t get started, but you should expect to personally guarantee everything for a while.
Developer · Andover, MA · Member since 2008 · 1k+ posts · 489 votes
14y
My goal isn't to necessarily get a CC or loan now without a PG, it's to make sure I take the appropriate steps to reduce the time that I need to do this.
The aspect that I thought was intriguing about the Credit Builder is that D&B will work to get everything on your credit report, no matter how immaterial the purchase was. So, whether it be the progress payment to your contractor or the monthly payment for your website, they will call the vendor to verify the payment details and post it on your credit report. This way I will build a strong credit profile faster.
This sounds great, but I can't help think if businesses provide D&B with their vendors, they will probably only tell them about the vendors they are paying on time. Obviously this would artificially increase their credit rating. If this is the case, why doesn't everyone do this. On the other hand, I would think lenders understand this and don't take a D&B credit report at face value. Maybe I'm just thinking about it too.......
Investor · Round Rock, TX · Member since 2010 · 8k+ posts · 4k+ votes
14y
I paid for some services like this with D&B and was very disappointed. I would suggest reading through some BP threads on building business credit and using those vendors to build your Paydex score.
Investor · Willow Spring, NC · Member since 2009 · 5k+ posts · 3k+ votes
14y
Lenders and vendors use D&B primarily, IMO, in other industry groups... industrial products, basic materials, manufacturing, etc. where there is a tangible and recurring Cost of Goods Sold.
Investor · Round Rock, TX · Member since 2010 · 8k+ posts · 4k+ votes
14y
Correct...so places like The Home Depot, Gas Stations (Shell, Exxon, etc.), Office Depot, etc. Again...look for the BP threads, call those companies up, get their application, and start using this stuff in your ordinary course of doing business. You'll build up some trade lines and a paydex score quickly doing this.
It is still very unlikely most balance sheet financiers will care though. Asset-based lenders have already priced in the incremental risk of you not providing a guarantee. Some of our less educated BP posters would claim that this incremental risk pricing still requires one to assume this risk anyway....I can't seem to understand their reasoning.
Note that learning subject-to purchases is a good alternative if personal guarantees are something you worry about. There are ways to minimize the due-on-sale risk that gives the lender an implicit call option. I won't divert the thread though if this is not of interest.