The “primer button” for every business credit file
1. What it actually is
- A vendor tradeline (often called Net-30, Net-60, Net-90) is simply “buy now, pay later” extended by a supplier instead of a bank.
- You order ink, packaging, cleaning supplies, coffee, uniforms, etc.; the vendor ships today and invoices you for full payment in 30–90 days.
- If the vendor reports that invoice to Dun & Bradstreet, Experian Business, or Equifax Business, it becomes a credit tradeline on your business (not personal) report.
2. Why vendors do it (and why they care)
- Vendors want loyal, volume customers; offering terms locks you in and beats bank paperwork.
- They risk a small amount to capture larger purchase orders over time.
- Many vendors self-insure the risk, so they price in a 1–3 % premium or forfeit early-pay discount—still cheaper than most loans.
3. Why it’s critical for building business credit
| Benefit | Vendor Tradeline Impact |
|---|---|
| First credit you can get | Banks want 2-yr tax returns; vendors often approve after 2–3 orders with an EIN and D-U-N-S number. |
| Establishes PAYDEX | Dun & Bradstreet requires three vendor tradelines to issue a PAYDEX score; on-time payments > 80 % = score 80+ (bank-grade). |
| Proves payment discipline | 12 months of clean Net-30 history is weighted 35 % of Intelliscore Plus and 40 % of FICO SBSS . |
| Dilutes personal guarantee | Once you have five reporting vendor lines, many banks will waive PG on revolvers and equipment loans. |
| Cash-flow cushion | 30-90 day float lets you sell inventory before cash leaves the account—working-capital neutral. |
4. Vendors that report
| Type | Typical Goods | Reporting Bureau | Starter Limit |
|---|---|---|---|
| Office / packaging (U-line, Quill, Reliable) | Boxes, labels, janitorial | D&B + Experian | $200–$1,000 |
| Industry suppliers (Grainger, Summa, Strategic) | Safety gear, tools, fasteners | D&B + Equifax | $500–$5,000 |
| Fleet / fuel (Shell, Fuelman) | Gas, maintenance | All three | $300–$2,500 |
Rule of thumb: open 3–5 vendor lines that report to at least one bureau; pay on or before day 30; use < 50 % of limit to mimic low utilisation.
5. Action checklist (next 30 days)
- Obtain EIN + D-U-N-S (free).
- Order small ($50–$150) from two Net-30 vendors above; choose “bill me” at checkout.
- Pay on day 25 (gives 5-day buffer).
- Verify reporting on D&B Credit Signal after 60 days; if missing, email vendor AR dept. and request reporting.
- Repeat until you have five clean tradelines; then graduate to fleet cards and bank lines.
Bottom-line discussion
Vendor tradelines are the on-ramp to the entire business-credit highway: cheap, easy to obtain, and weighted heavily by every scoring model.
Start small, pay early, stack five, and you’ll unlock cheaper money, bigger limits, and zero personal guarantees—all before your first bank loan application.
BusinessMoney.broker 