How to Build Business Credit From the Ground Up

Building business credit is crucial for securing funding, better loan terms, and financial stability. A strong business credit profile helps you access credit cards, lines of credit, and financing options without relying on personal credit.

Many small business owners don’t realize that business credit works differently than personal credit. This guide walks you through the exact steps to establish and grow business credit the right way.

Step 1: Separate Your Business and Personal Finances

To start building business credit, you need to separate your business finances from personal finances.

Here’s how:

• Register your business as an LLC or Corporation (sole proprietors don’t have separate credit).
• Obtain an EIN (Employer Identification Number) from the IRS—it works like a Social Security Number for your business.
• Open a business bank account and use it exclusively for business transactions.

Keeping your finances separate protects your personal credit and builds your business credit profile.

Step 2: Establish Your Business Credit Profile

You can’t build business credit if lenders don’t know your business exists. Set up your business credit profile with the major business credit bureaus:

• Dun & Bradstreet (D&B): Get a free D-U-N-S number at dnb.com—many lenders use this to check your business credit.
• Experian Business: Check your Experian business credit report at experian.com/business.
• Equifax Business: Monitor your business credit score at equifax.com/business.

Once your business is registered with these bureaus, you can start building a credit history.

Step 3: Open a Business Credit Card and Trade Accounts

The fastest way to build business credit is to use credit and pay on time.

Start with:

• A business credit card – Apply for one that reports to business credit bureaus (e.g., Chase Ink, Amex Business).
• Vendor trade accounts (Net-30 accounts) – These allow you to buy now and pay later, helping establish a payment history.

Great Net-30 vendors that report to credit bureaus:

• Uline (shipping supplies)
• Grainger (industrial supplies)
• Quill (office supplies)

Use these accounts for small purchases and always pay on time or early to build a positive credit history.

Step 4: Make On-Time Payments and Keep Credit Utilization Low

Your business credit score is heavily influenced by payment history and credit usage.

To maintain a strong credit profile:

• Always pay bills early or on time – Late payments hurt business credit scores.
• Keep credit utilization under 30% – If your limit is $10,000, don’t use more than $3,000 at any time.
• Regularly monitor your credit reports – Errors can lower your score, so dispute incorrect information.

Pro Tip: Many lenders look for at least six months of on-time payments before approving loans or credit lines.

Step 5: Apply for Business Loans and Higher Credit Limits

Once you’ve built a solid payment history, you can apply for better financing options:

• Business lines of credit – Flexible borrowing for cash flow needs.
• Small Business Administration (SBA) loans – Low-interest loans for qualified businesses.
• Equipment financing or working capital loans – To expand operations without using personal credit.

Start with smaller credit limits and increase them over time to improve your business creditworthiness.

Final Thoughts: A Strong Business Credit Profile Opens Doors

Building business credit takes time, but it pays off. A solid credit profile helps you secure funding, reduce financial stress, and scale your business without relying on personal guarantees.

Need help managing your business finances or setting up bookkeeping?