How to Build Business Credit: 7 Simple Steps to Get Started

Building your business credit can start with a few steps, like setting up your legal business entity and becoming more visible to credit reporting agencies. It also involves using financial tools like a D-U-N-S® Number, or opening a business bank account and using business credit responsibly.

Just like individuals rely on personal credit scores, businesses also have credit profiles that basically serve as your company’s financial report card to assess financial health and credibility.

Whether you manage an early-stage startup or larger corporation, it’s a good idea to learn how to establish business credit so you can navigate this important aspect of business finance.

What is business credit?

Business credit is a measure of a company’s creditworthiness and ability to meet financial obligations. Business credit reflects a business’s history of borrowing and repayment.

Similar to personal credit, consistently paying bills on time, avoiding defaults and maintaining a solid credit profile can help your business grow without relying on your personal credit history.

Having a good business credit score can also help your business secure more favorable financing options, such as lower interest rates, higher credit limits and flexible payment terms.

Credit bureaus such as Equifax, Experian, and Dun & Bradstreet evaluate your business credit based on factors like payment history, outstanding debts and trade relationships. You can check your business credit score for free through OnDeck, or directly through various credit bureaus.

Key scores like Dun & Bradstreet’s PAYDEX® score are used by lenders and suppliers to check your company’s financial health. This makes strong business credit a valuable asset for your business.

Why is business credit important?

Having  a strong business credit file is important because it can help your company gain access to essential financial tools like loans and business credit cards, often at competitive interest rates and better terms.

Separating personal and business finances can also protect your personal credit score from potential business-related risks.

Good business credit may also help your company make strategic investments — such as hiring new staff, boosting marketing efforts or scaling operations — without straining cash flow.

Seven steps to build business credit.

To build business credit, visibility is key. So once you’re set up as a legal business entity, keep your personal finances separate and follow these steps to help bolster your credit profile.

1. Establish your business as a legal entity.

The first step in building business credit is to officially establish your business as a distinct legal entity, such as a limited liability company (LLC), C corporation or S corporation. Forming a legal business structure not only helps to provide liability protection, but also signals credibility to lenders and suppliers.

Sole proprietors can also build business credit, but they often find it more challenging. This is because lenders may evaluate personal credit reports in the absence of a separate legal entity.

2. Obtain an Employer Identification Number (EIN).

An Employer Identification Number (EIN) is a unique nine-digit number issued by the IRS. It’s like a Social Security number for your business.

Your business needs an EIN for filing taxes, setting up a business bank account, applying for small business loans and business lines of credit, and working with larger vendors. With your EIN in place, creditors can more easily track your business’s income, payment activity and financial history.

3. Request a Dun & Bradstreet Number.

Another step in establishing business credit is obtaining a D-U-N-S® Number from Dun & Bradstreet. This unique identifier is critical for creating and monitoring your business credit profile. A D-U-N-S® Number helps vendors, suppliers and creditors assess your business’s financial health and creditworthiness.

While Experian and Equifax automatically generate business credit profiles based on lender-reported and public information, Dun & Bradstreet requires an application for your D-U-N-S® number. Many business owners will find this extra step worth taking, because it provides key insights into your financial health. It also ensures vendors can report positive payment behavior to strengthen your credit profile.

4. Open a business bank account.

Opening a business bank account is important for separating personal and business finances. It not only adds credibility to your company, but also ensures accurate financial record-keeping. This is important for tax purposes, applying for loans, and presenting a professional image to lenders and vendors. Furthermore, bank statements from a business checking account can be used to verify payment history for loan and vendor applications.

Make sure to use your business account for all business expenses, including bills and credit card balances, to establish a clear payment history. Responsible use of a business credit card, paid from the business account, can help build a solid business credit profile over time.

5. Apply for business credit.

Applying for business funding options, such as a business credit card, business line of credit or a small business loan can be a good strategy for kickstarting your business credit journey.

Look for lenders or card issuers that report your payment activity directly to the major business credit bureaus. Promptly making payments from your business bank account helps create a strong business credit history.

You can expand your efforts by setting up lines of credit with vendors or suppliers. Many businesses are open to offering payment terms like net-30 accounts, which allow you to pay invoices within 30 days. Encouraging vendors to report your on-time payments to credit bureaus may further strengthen your company’s credit profile.

6. Establish tradelines with suppliers.

Setting up tradelines with suppliers — such as net-30 accounts — helps your business build credit by allowing delayed payments on invoices. By opening credit accounts with vendors that offer terms like net-30, you can demonstrate your ability to manage payments responsibly. These relationships not only help with your cash flow, but also enhance your credit history if the vendors report your payments to credit bureaus.

If your vendors don’t automatically report to credit bureaus, list them as trade references with Dun & Bradstreet. Building relationships with multiple suppliers, even small ones, can further enhance your business’s credit standing over time.

7. Monitor your business credit report.

Business credit isn’t something you can set and forget. Regularly monitoring your credit report ensures you’re aware of your company’s standing and can quickly address inaccuracies. Pay attention to reports from key credit bureaus like Equifax, Experian, and Dun & Bradstreet.

Keeping your business credit rating high requires careful observation and quick issue resolution. By continually tracking your financial health, you protect your borrowing potential and position your business for long-term success.

How fast can a business build credit?

While it can take some time, there are a few things you can do to help build business credit faster. Making timely payments, utilizing credit properly, and diversifying credit sources may help accelerate credit building. Monitoring your business credit can be important to nurturing this process, so make sure you’re familiar with how to check your business credit and read your report.

What is a good business credit score?

Business credit scores depend on the individual credit bureau, but typically range from 0 to 100, with higher scores indicating lower credit risk. A good business credit score is generally above 80 from Dun & Bradstreet, or above 75 for Experian Business. Lenders and suppliers rely on your business credit score to gauge creditworthiness and determine approval and terms of credit. Business credit scores depend on the individual credit bureau, but typically range from 0 to 100, with higher scores indicating lower credit risk.

How to check and monitor business credit scores.

To check and monitor your business credit score, you’ll need to use third-party companies like Experian or Equifax. Dun & Bradstreet is another key provider focused exclusively on business credit. These agencies offer detailed credit reports that can be accessed online, often through paid subscriptions or one-time fees. You can also check your business credit score for free from OnDeck.

Business credit reporting agencies offer different tiers of service, allowing you to stay informed about changes in your credit profile. Conducting self credit checks can help you maintain a strong score, while also identifying steps to improve your creditworthiness.

Is business credit the same as personal credit?

No, business credit and personal credit are different. Business credit depends on the credit history and financial performance of a business entity, while personal credit relates to the credit history of an individual.

However, during the early stages of business credit establishment, lenders may factor in personal credit history when evaluating the creditworthiness of small business owners. Business owners with a limited credit history but fair credit may search for a “no credit check business loan,” which generally refers to funding that uses a soft credit inquiry rather than a hard credit inquiry.

How to leverage personal credit to build business credit.

If you’re a new business and don’t yet have established business credit, using personal credit responsibly can help you build credit for your business. Opening a business credit card linked to personal credit is an effective way to facilitate this process. Always pay balances on time and maintain a low credit utilization ratio to positively impact your credit history.

Tips for maintaining a good credit profile.

Similar to maintaining good personal credit, maintaining a good business credit profile requires consistency and discipline. Here are a few tips:

Pay on time. Consistent, timely bill payments are the most significant factor in building strong credit, which includes debts and payments to suppliers. Avoid late payments, which can negatively impact your score.

Avoid excessive debt. Keep debt levels manageable and maintain a low credit utilization ratio — typically below 30%.

Monitor reports regularly. Check credit reports for accuracy and address errors promptly.

Build trade relationships. Cultivate relationships with multiple suppliers who report trade credit payments to credit bureaus.

By adopting these practices, you can protect your credit score and unlock a range of growth opportunities for your business. It’s important to note that in addition to consistency, factors like time in business and industry also play a role in securing financing.

Frequently Asked Questions

Does business credit affect personal credit?

Business credit and personal credit are typically kept separate, but there are circumstances where they may overlap. If you use personal guarantees to secure business loans or credit, missed payments could negatively impact your personal credit score.

Additionally, sole proprietors or small business owners who rely heavily on personal finances for their businesses may see their personal credit directly tied to business activities. It’s essential to differentiate your business credit from personal credit to minimize risks to your personal financial profile.

How long does it take to build business credit?

Building business credit doesn’t happen overnight — it requires time and consistency. The exact timeline for building business credit depends on various factors, like how quickly you register your business, open accounts with vendors who report payment histories, and demonstrate responsible credit usage. The sooner you start building positive credit habits, the quicker you’ll see results.

What credit score does an LLC start with?

An LLC is a legal entity, but it’s not required to have a certain business credit score. Like every business, your LLC will begin to accumulate a credit profile once you establish accounts and vendors that start reporting your payment history to business credit bureaus.

This process allows credit bureaus to generate a score based on the LLC’s performance, with no set starting point until activity occurs. This is one of many reasons why it’s important to responsibly manage finances as soon as possible.

Expert tips to help a small business owner establish and build business credit.

Foundational steps

“From our perspective at Equifax, there are a few foundational steps for laying the groundwork for a strong and healthy business. Following these steps can help small business owners proactively build a credible credit profile:

• Create Your Business’s Financial Identity: Separating your business from your personal finances by forming a legal business entity like an LLC or corporation.
• Get the Right Identifiers: Secure an Employer Identification Number (EIN) from the IRS, which can be the first step in establishing a credit file for your business and ensure your financial activity is correctly attributed to it.
• Establish a Business Bank Account: Open a dedicated business checking account and use it for all business transactions.
• Build Vendor Tradelines: Work with suppliers and vendors who report payment activity and don’t forget to make on-time payments.
• Responsibly Use Business Credit: As your credit file grows, apply for a business credit card or a small line of credit.
• Monitor Your Credit Report: Regularly review your business credit report for accuracy.”

David Adams, Head of Commercial Product Marketing
Equifax

Business checking accounts

“Managing finances is often the most daunting part of running a business, which is why I always start with one simple tip: open a dedicated business checking account. When your personal and business finances are separated, you’re not only protecting yourself from unnecessary personal liability, but you’re also creating the clear transaction history lenders look for when they review your business. Lili’s business checking account is built specifically for small business owners, with no hidden fees and built-in tools that help organize expenses and simplify day-to-day money management.

From there, focus on turning your everyday banking activity into a credit-building engine. At Lili, we’ve seen that many owners lean on personal credit cards or loans in the early stages. That can blur the line between personal and business obligations and make it harder to build a distinct business credit profile. With Lili’s business checking account and our credit-building program BusinessBuild, business owners manage their banking and credit-building in one place.

The program helps you build, monitor, and optimize your business credit profile as part of your day-to-day operations. It includes the BusinessBuild Credit Card, a secured credit card that enables business owners to contribute to their business credit profile with every purchase, as activity and monthly payments are reported to Dun & Bradstreet to help build a credit history for the business. Business owners can also monitor six key Dun & Bradstreet scores and receive real-time alerts for important changes in payment history, credit utilization, and outstanding balances, which helps highlight potential risks early.

We’ve seen customers move from relying on personal credit to qualifying for better options in their business name, simply by structuring their banking correctly and letting their day-to-day activity work for their business credit. One BusinessBuild customer even saw their business credit jump from 24/100 to 89/100. Building business credit doesn’t have to be complicated. With the right tools, it can become a natural part of running and growing your business.”

Matan Vered, Vice President of Product
Lili