Using Net 30 Accounts to Build Business Credit

met 30 accounts in businessIf your business is in its formative stages, you may find it difficult to build business credit. Business credit cards, loans, and lines of credit are typically out of reach for small companies with limited credit histories. Thankfully, you may be able to find credit-building opportunities in the form of net 30 vendor accounts.

What Is a Net 30 Account?

A net account requires that the balance be paid in full at the end of each term. For example, a net 30 account will give you 30 days to repay the vendor for the products and services you’ve purchased. These accounts will typically only be available with shorter terms (e.g. 30 days) to new businesses, but as your business proves that it has the capacity to repay the balance on time at the end of each term, longer terms may become available. Terms of up to 180 days are available through some vendors, but only once your company has built a proven track record of reliable payment.

Net 30 Advantages

Net 30 accounts are typically easier to obtain than revolving accounts (some can be started with just an FEIN and 411 listing), and they require the amount owed to be paid in full at the end of each term, so they may make it easier to avoid running up excessive balances. By deferring the payment until the end of the term, they allow your business to hold on to more operating capital in the meantime.

How Net 30 Accounts Can Help to Build Business Credit

Vendors who issue Net 30 accounts will typically report your line of credit and payment history to the business credit bureaus, including Dun & Bradstreet. If you haven’t already activated your D&B D-U-N-S® number, it will be activated at this point. From here, you can start building up your PAYDEX® score. The PAYDEX® is a numerical value of up to 100 (100 being the best) that quantifies your business’s payment history.

Here are some best practices for raising your score:

  • Always try to pay off your Net 30 accounts in half the available term, or less.
  • Establish a minimum of 3 (5 is better) Net 30 accounts.
  • Use each of your accounts every month.

If you follow these rules, your company should start to establish an excellent PAYDEX® quite quickly. Of course, it should also be noted that while paying your bills on time is the first step, the net 30 vendors you pay also have to report the timely payment to Dun & Bradstreet, in order for the action to positively impact your business credit score. You can report who you pay to Dun & Bradstreet by using the CreditBuilderTM product, available by clicking the link.

Having a high score in place will increase the likelihood of your business being approved for credit cards, and later, loans and lines of credit without you having to risk your personal assets. If those accounts are also managed prudently, your business should have credit file strong enough to weather tough times, expand if necessary, and take advantage of exciting business opportunities whenever they arise.


John R. Klaras is a serial entrepreneur and small business professional, a writer, and an educator by trade. With nearly a decade of experience in the telecommunications industry, he is currently in the process of building a burgeoning new microbusiness. He has written for leading companies in a wide variety of verticals, including travel, finance, motorsports, and real estate.