Building business credit is a smart move for any entrepreneur who wants to access capital, negotiate favorable vendor terms, or scale without risking personal assets. Unlike personal credit, business credit is tied to your company’s Employer Identification Number (EIN)—not your Social Security number—offering liability protection and financial flexibility.
The good news? You don’t need years of history to start. With consistent steps, you can build solid business credit in 6–12 months. Here’s how.
1. Legally Establish Your Business
Before you can build credit, your business must exist as a legal entity. Register as an LLC, S-Corp, or C-Corp (not a sole proprietorship) to create separation between personal and business finances.
2. Get an EIN from the IRS
Apply for an Employer Identification Number (EIN) for free at IRS.gov. This is your business’s tax ID and the foundation for all credit activity. Never use your SSN for business accounts.
3. Open a Dedicated Business Bank Account
Keep finances separate. Use your EIN to open a business checking account. This builds legitimacy and makes tracking expenses easier—critical for credit applications.
4. Register with Business Credit Bureaus
Major business credit bureaus—Dun & Bradstreet (D&B), Experian Business, and Equifax Business—track your credit. Start by getting a D-U-N-S® Number from Dun & Bradstreet (free for most businesses). This links your company to its credit profile.
5. Apply for a Business Credit Card or Starter Net-30 Account
Begin small:
- Net-30 accounts: Vendors like Uline, Grainger, or Crown Office Supplies offer “Net 30” terms (pay within 30 days). They often report to credit bureaus.
- Secured business credit cards: Require a deposit but help build credit if reported to bureaus.
Always pay on time—payment history is the biggest factor in business credit scores.
6. Monitor and Maintain Your Credit
Check your business credit reports quarterly. Dispute errors and avoid maxing out credit lines. Aim to use less than 30% of your available credit.
FAQs
Q: Can I build business credit with bad personal credit?
A: Yes! While some lenders check personal credit initially (especially for new businesses), many vendors and credit cards focus on your EIN once you’ve established tradelines.
Q: How long does it take to build business credit?
A: You can establish a basic profile in 30–60 days. A strong score typically takes 6–12 months of consistent, on-time payments.
Q: Do all business credit cards report to credit bureaus?
A: Not all. Always confirm with the issuer whether they report to Dun & Bradstreet, Experian Business, or Equifax Business before applying.
