Tier 1 vs Tier 2 Vendor Credit Explained

The strategic order of applying for vendor credit to build a robust comparable credit history.

Building business credit is a step-by-step process. You cannot jump straight to applying for high-limit cash credit cards without first establishing a foundation of vendor credit.

What is Tier 1 Credit?

Tier 1 credit consists of starter vendors who will grant your business Net-30 terms without checking your personal credit or requiring a personal guarantee. These vendors report your payment history to business credit bureaus like Dun & Bradstreet, Experian Business, and Equifax Small Business.

What is Tier 2 Credit?

Once you have established 3-5 positive reporting trade lines in Tier 1, you can move on to Tier 2. These are typically retail store cards (e.g., Staples, Amazon, Home Depot) that require an established business credit profile but still don't require a personal guarantee.