A How-To Guide to Building Business Credit
Building business credit is one of the most important steps for any small business owner. Whether you’re looking for startup funds, expanding your operations, or simply learning how to manage business finances, establishing strong business credit can open doors to new opportunities and long-term growth.
In this guide, we’ll walk through everything you need to know about building business credit, from separating your personal and business finances to understanding business credit reporting agencies and improving your business credit score.
Why Business Credit Matters
Having strong business credit shows that your company can handle its finances responsibly. It helps you qualify for better lines of credit, lower interest rates, and more favorable payment terms from vendors and suppliers.
When you build business credit:
- You protect your personal credit score by keeping business debts separate.
- You increase your borrowing power for business expansion or new projects.
- You improve your reputation with partners, lenders, and investors.
Simply put, your business credit profile acts as a financial report card for your company.
Here are 13 steps to follow when building credit for your start-up business:
Step 1: Separate Personal and Business Finances
The first step in establishing business credit is to make your company a legal, standalone entity.
- Form a Business Entity
Register your business as an LLC, S-Corp, or C-Corp. This creates a legal separation between your personal and business finances. - Get an Employer Identification Number (EIN)
Your EIN acts like a Social Security number for your business. It’s used by banks, the IRS, and credit bureaus to identify your company. - Open a Business Bank Account
Set up a dedicated business bank account to manage income and expenses. Use it for everything, from paying bills to receiving customer payments. Having this clear separation helps build your business credit history and keeps your financial planning organized.
Step 2: Establish Your Business Identity
Before lenders and credit bureaus can recognize your business, they need to see that you’re legitimate.
Make Your Business Easy to Verify
- Register with your state and local agencies.
- Get a business address and phone number that match across all your records.
- Create a professional website and business email (like info@yourcompany.com).
- List your company on Google Business and other online directories.
Consistency builds credibility and helps lenders verify your business details when reviewing corporate credit reports.
Step 3: Get Your D-U-N-S Number
To start building business credit, you’ll need a D-U-N-S number from Dun & Bradstreet, one of the main business credit bureaus. This number identifies your business in their system and allows you to start generating a business credit report. You can apply for it for free on the Dun & Bradstreet website. Once you have it, keep your business information current so your business credit profile stays accurate.
Step 4: Open Credit Accounts in Your Business’s Name
Now it’s time to start building your credit. Apply for accounts that report to business credit reporting agencies.
Apply for a Business Credit Card
A business credit card is often the first step in creating a business credit history. Use it responsibly, keep your balance low, and always pay by the due date. If you’re wondering how to get your first business credit card, start with your existing bank; many offer entry-level cards for small businesses.
Use Vendor Credit
Many vendors and suppliers offer short-term financing, often called Net-30 or Net-60 payment terms. This means you can buy goods or services and pay within 30 or 60 days. Choose vendors that report to credit bureaus, such as:
Consistent payments on these accounts help you build business credit over time.
Step 5: Pay All Bills on Time (or Early)
When it comes to your business credit score, nothing matters more than your payment history. Always pay bills on or before the due date. Late payments can lower your score and make lenders hesitate to extend new lines of credit. If possible, set up automatic payments to avoid missing a due date. Paying early can even boost your business credit score faster with some reporting agencies.
Step 6: Monitor Your Business Credit Reports
Just like you would track your personal credit, it’s essential to check your corporate credit reports regularly.
Major Business Credit Bureaus
- Dun & Bradstreet: Provides a PAYDEX score ranging from 0–100. A score of 80+ is considered good.
- Experian Business: Focuses on payment trends and debt levels.
- Equifax Business: Tracks payment history and financial stability.
Set up business credit monitoring with these agencies so you can spot errors or suspicious activity quickly. Keeping your reports accurate is part of maintaining strong business credit.
Step 7: Keep Credit Utilization Low
A good rule of thumb for how to manage business finances is to keep your credit utilization below 30%.
If your business credit card limit is $10,000, try to carry no more than $3,000 in balances. This shows lenders that your company isn’t overextended and can manage debt wisely.
Low utilization also improves your overall credit scores across different business credit bureaus.
Step 8: Work With Vendors That Report to Credit Bureaus
Not all vendors or lenders report to business credit reporting agencies, so choose partners carefully. Before opening new accounts, ask whether your payments will be shared with Dun & Bradstreet, Experian, or Equifax. The more positive payment data you have on file, the stronger your business credit profile becomes. Over time, this helps you qualify for better lines of credit, business loans, and small business growth strategies.
Step 9: Keep Business Information Consistent
Inconsistencies between your documents can slow your progress. Make sure your business name, address, phone number, and EIN are exactly the same across:
- Bank accounts
- Credit applications
- Tax filings
- Vendor accounts
This helps credit bureaus link all your records together under one accurate business credit report.
Step 10: Use Credit Responsibly to Grow Your Business
Once you have a solid business credit history, you can leverage it for business expansion.
Smart Ways to Use Credit:
- Apply for a business line of credit to manage cash flow.
- Seek equipment financing for upgrades or new tools.
- Reinvest in marketing, inventory, or new products.
Use your credit responsibly to borrow only what you can repay and keep track of your spending. Over time, good habits will improve both your business and personal credit scores.
Step 11: Check What Makes a Good Business Credit Score
Many business owners ask: “What is a good business credit score?”
Generally speaking:
- A Dun & Bradstreet PAYDEX score of 80 or higher is considered strong.
- Experian Intelliscore Plus scores range from 0–100; scores above 76 are considered excellent.
- Equifax Business Credit Risk Score above 90 means low risk to lenders.
Each credit bureau uses different methods, but the goal is the same: to show that your business can pay its debts on time and manage credit wisely.
Step 12: Maintain and Strengthen Your Credit Over Time
Building business credit isn’t a one-time task. Keep nurturing it as your company grows.
Here’s how to maintain your strong business credit:
- Keep using your business credit cards responsibly.
- Continue working with vendors and suppliers that report to bureaus.
- Review your business credit reports every few months.
- Dispute any errors you find with the appropriate credit bureau.
- Make all payments early or on time.
Strong credit not only helps you access financing but also increases your business’s value and trustworthiness.
Step 13: Plan for Growth and Expansion
Once your business credit is well established, you can start thinking bigger.
Here are a few small business tips for using credit to grow:
- Secure start-up funds or expansion loans at lower interest rates.
- Negotiate better payment terms with your suppliers.
- Invest in growth strategies such as digital marketing, hiring, or new locations.
- Build relationships with lenders for future opportunities.
Sound business financial planning and responsible credit use can transform your company’s future.
Learning how to build business credit is one of the smartest things a small business owner can do. It takes time and discipline, but the payoff is worth it: better financing options, stronger relationships, and the flexibility to take your business further.
Remember:
- Keep business and personal finances separate.
- Always pay on time
- Monitor your reports regularly.
- Work with vendors that help you build your credit history.
Scale Bank Can Help You Build Business Credit
At Scale Bank, we understand that small businesses need more than just checking accounts; they need a partner who will help them grow. From business bank accounts and credit cards to expert advice on business financial planning and small business growth strategies, our team is here to help you start building and strengthen your financial foundation.
If you’re ready to build business credit and take your company to the next level, contact a Scale Bank advisor today.
