CreditStrong Business Credit Review

CreditStrong Business Credit Review

CreditStrong is an online lender that provides credit builder loans to consumers and businesses. Their business accounts help companies with limited or bad credit establish a positive financial tradeline and improve their credit scores.

If you’re considering using a credit builder loan to work towards good business credit, our CreditStrong review will tell you everything you need to know about them.

(See our CreditStrong review if you’re interested in their consumer products.)

Our Verdict: CreditStrong is a powerful product for building business credit. And with the new low price plans, is accessible for even cash-strapped small businesses, too.

 

CreditStrong Business Pricing and Plans

CreditStrong Features

Option 1

Option 2

Option 3

Option 4

Option 5

Option 6

Tradeline Reported

$2,500 installment loan

$2,500 installment loan

$5,000 installment loan

$5,000 installment loan

$10,000 installment loan

$10,000 installment loan

Monthly Payment

$100

$115

$200

$220

$400

$440

Maximum Payment History Reported

25 months

25 months

25 months

25 months

25 months

25 months

Loan Interest Rate

0%

13.26%

0%

8.96%

0%

8.96%

Business Credit Bureau Reporting

Equifax, PayNet, and SBFE

Equifax, PayNet, and SBFE

Equifax, PayNet, and SBFE

Equifax, PayNet, and SBFE

Equifax, PayNet, and SBFE

Equifax, PayNet, and SBFE

One-Time Origination Fee

$349

$149

$549

$199

$749

$299

Source: CreditStrong

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How Does CreditStrong Business Work?

CreditStrong Business helps companies improve their credit scores with credit builder loans. They’re like traditional installment loans, but CreditStrong keeps the proceeds in a locked savings account as collateral until you cancel or complete the repayment term.

Using the loan proceeds as collateral means CreditStrong doesn’t have to worry about borrowers defaulting. As a result, they’re comfortable offering accounts to businesses that would be too high of a risk for other lenders.

When you open an account, CreditStrong reports it to the commercial credit bureaus as a financial tradeline. As you make your monthly payments on time, you’ll improve your payment history and your business credit score.

If you reach your credit goals or want to discontinue the payments for any reason, you can cancel whenever with no penalty. If you do, CreditStrong will give you the portion of the principal balance that you paid off up to that point.

For example, say you take out an account with a $220 monthly payment. CreditStrong would put $5,000 into a savings account and report a tradeline for the same amount to Equifax, PayNet, and the Small Business Financial Exchange (SBFE).

You could make your payments on time for 12 months, reap the credit-building benefits, then cancel the account and get back $2,284.30 of the $2,640 you paid during those 12 months of payments. (Based on this payment plan.)

Pros of CreditStrong Business

These are the most significant pros of CreditStrong Business accounts. Because their purpose is to help small businesses improve their credit scores, we’ll focus on the ways they succeed in that regard.

Almost Any Business Can Qualify

If you have limited or poor credit, it’s hard to qualify for business financing. That can make improving your company’s credit history frustrating since you need financial tradelines to build business credit scores.

Normally, your only option to start building business credit is to use your personal credit to a get business financing or sign up for a bunch of net 30 accounts

Fortunately, almost any business can get a CreditStrong Business account. To be eligible, all your company needs is to:

  • Be at least three months old
  • Have an Employer Identification Number (EIN)
  • Be located in the United States with a physical business address
  • File as a Limited Liability Company (LLC), partnership, or corporation

There’s no hard inquiry when you apply for an account, which means CreditStrong won’t check your personal credit or business credit reports.

It’s a Financial Tradeline

There are two types of tradelines that help with building business credit: vendor and financial tradelines. Vendor tradelines refer to credit that comes from other businesses, such as net 30 payment terms from a supplier.

Financial tradelines refer to financing that comes from a lender or financial institution, such as a small business loan or a secured credit card. They’re harder to qualify for than vendor tradelines, but they have a more significant impact on your credit.

A CreditStrong Business account is one of the few financial tradelines available to brand new businesses. It’ll show up in your credit reports as a $5,000 or $10,000 installment loan.

It Reports to Each Major Credit Bureau

CreditStrong Business reports directly to three business credit bureaus: Equifax, PayNet, and the SBFE. They promise to begin reporting to D&B and Experian soon.

However, in practice, their data already shows up on both of those credit reports. The SBFE passes along the information it receives to D&B and Experian, as well as Equifax and LexisNexis Risk Solutions.

Cons of CreditStrong Business

Here are the most significant cons of CreditStrong Business accounts. Once again, because their only purpose is to help you build credit and not finance purchases, we’ll focus on their drawbacks through that lens.

It’s Not Cheap

One of the primary reasons to build credit and improve your credit score is to pay less in interest. As a result, having to pay someone to accomplish that goal is somewhat counterproductive.

Unfortunately, you have to pay an upfront fee and sometimes ongoing interest to get a CreditStrong Business account. For new businesses without significant revenue, savings, or financing, it can be expensive.

It May Take a Couple of Months to Report

Many businesses are in a rush to build credit so they can start applying for financing as soon as possible. Unfortunately, your CreditStrong account may not show up on your credit reports immediately.

It takes time for CreditStrong to send your information to the credit reporting agencies, and for each one to process the data and add it to your report. As a result, you’ll usually see the account appear between 30 and 60 days after making your first payment.

Our Verdict

Building credit is a daunting prospect for new small businesses. Most lenders will be unwilling to work with you until you’ve been around for a year or two and demonstrated the ability to generate significant annual revenue.

CreditStrong Business is a great way to get around that obstacle and jumpstart the credit-improvement process. You can begin building business credit as early as three months after your first day in business.

If you have enough cash for the origination fee and monthly payments, we definitely recommend considering a CreditStrong account. No other products on the market provide an installment financial tradeline for new businesses without a credit check.

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FAQs

Is CreditStrong a Legit Business?

Yes, CreditStrong is definitely a legitimate business. In fact, they’re a division of Austin Capital Bank (ACB), which is one of the highest-rated financial institutions in the United States.

ACB is based in Austin, Texas, and receives stellar ratings from multiple objective third parties. That includes a 5 Star Safe and Sound Rating from BankRate, a 5 Star Superior Rating from Bauer Financial, and an A+ Health Rating from LendingTree.

In addition, ACB has been on the Inc. 5000’s list of the fastest-growing private companies in the United States since 2016, ranking number 1,134 in 2020. It’s also a federally insured institution, and you can verify their financial condition with the FDIC.

You can rest assured that your money and personal information are secure with CreditStrong.

How Much Will It Help Increase My Score?

Unfortunately, the CreditStrong Business products are new, so they haven’t released data around how much it helps build your credit scores. There are several reasons why credit score impacts from the the tradeline vary, including the following:

  • Your use of the account will have a significant impact on your results.
  • Your other financial and vendor tradelines will also affect your scores.
  • There are many different business credit scores, and they all function differently.

However, assuming you make your payments on time and take no other action that affects your business credit, you can be confident that it will improve your scores. 

If you’re new to establishing business credit, getting your first three tradelines are crucial to qualifying for financing. If CreditStrong’s business credit builder loan is one of those accounts, rest assured it will have a big impact on your ability to obtain business financing. 

How Fast Does CreditStrong Work?

We don’t have data from CreditStrong on typical timelines. Based on the way that new business tradelines typically work, you can expect it to take 30-90 days to impact your business credit reports and scores. 

Like most lenders, CreditStrong only reports to the credit bureaus once per month. Once they do, it may take weeks for the bureaus to update your credit reports.

In addition, you’ll likely need to have at least one payment on the tradeline before it has a noticeable impact on your credit. The more payments you make, the more it builds your scores. Building good credit is a marathon, not a sprint.

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