Business Credit Definitions

LOC – Line of credit

EIN – Acronym for Employee Identification Number. This number is also called a Tax ID number. This number is issued by the IRS and each business can only have one Tax ID number.

Vendor Term Account – Available credit with a vendor such as Dell, Sears or Home Depot. We know them as store cards or store credit in the personal credit realm

Vendor Net 30 Accounts – a line of credit, usually extended by a vendor that has to be paid in full in 30 day. The only way this is seen as a positive payment is if the balance in paid off in or before the 30 days. There are Net 10 and Net 15 accounts that follow the same pattern.

Revolving Line of credit – This is a line of credit like your typical credit cards where you have an interest rate and you are given a minimum payment to pay every month.  Vendor lines come in “net 30″ or “revolving” terms.

PG – Simply put this is the acronym for Personal Guarantor.  Whenever you are requested to have a guarantor for any type of credit facility, they are asking for a possible secondary source of repayment.  Should the business entity not be able to fulfill the obligations, the guarantor would then be held primarily liable for the account.  This is where the separation of the credit liability between your business and personal credit comes in.

Shelf CorporationAccording to Wikipedia, “A shelf corporation, also called an aged corporation, is a corporation that has had no activity. It was created and put on the “shelf” to age.” Some lenders do not lend to brand new corporations so one method of getting around such a restriction is by purchasing a shelf corporation.

TradelineAlso known as trade reference is any credit account listed on your credit report. Examples: Vendor lines, Credit Cards, Mortgages etc.

DNB or Dun and Bradstreet or D&B – This is one of the two major business credit agencies. They currently hold 75% of the business credit reporting market share.

DUNS Number – DUNS is an acronym for Data Universal Numbering System which is a system developed and regulated by Dun and Bradstreet which assigns a unique number to a single business.  Although highly touted for their use of public domain information and verification, their trade experience has been shunned by many in the industry due to the fact they offer self reporting of trade experiences (they can provide their individual trade experiences to DNB for verification.

Experian Business – This is the another business credit agency. There are a numerous lenders who use Experian Business.  They also offer users of their service to combine the credit of the primary owner with the business credit to provide a blended score.

IntelliscoreThis is the business credit score developed by Experian Business. You need 2 trade references in order to get an intelliscore. This score also ranges from 0-100 and a good score is considered 75. This score is derived from the timely many in which you pay your creditors as well as the dollar amount.

Equifax Business – this is a score that is based on employee size and financial statements. This score is used by the bigger lenders.

Red Flagged – this is the death of a company’s credit profile.  When the credit agencies such as Experian, DNB or Equifax determine the information that is being provided by outside sources or even you is invalid, incorrect or possibly fraudulent, they will “Red Flag” your company meaning they put an alert on your profile stating the reason they consider you high risk and block any credit history you may have had.D&B Rating – this is a score that is based on employee size and financial statements. This score is used by the bigger lenders.

D&B Rating – this is a score that is based on employee size and financial statements. This score is used by the bigger lenders.