The Basics of Business Credit and How to Build It

Just like individuals have personal credit scores, businesses can build credit too—and it can be a game-changer for growth. Whether you’re a solopreneur, freelancer, or small business owner, understanding and building business credit gives you more financial options and credibility.

In this article, you’ll learn what business credit is, why it matters, and how to start building it the right way.

What Is Business Credit?

Business credit is a financial profile that reflects how responsibly your business handles its debt and financial obligations.

It’s separate from your personal credit and tied to your business name and Employer Identification Number (EIN) (not your Social Security Number).

Business credit is used by:

• Lenders and banks

• Vendors and suppliers

• Leasing and insurance companies

• Even potential partners or clients

Why Business Credit Matters

✅ Get better loan terms
A strong credit profile = lower interest rates and higher approval odds.

✅ Access business credit cards
Separate your finances and earn rewards or cashback.

✅ Establish vendor and trade lines
Build trust with suppliers who may offer you “Net 30” or “Net 60” payment terms.

✅ Protect your personal credit
No need to rely on personal guarantees for every business purchase or loan.

✅ Scale your business faster
More capital = more inventory, advertising, staff, or tools when you need them.

How Is Business Credit Different from Personal Credit?

Step-by-Step: How to Build Business Credit

✅ 1. Set Up Your Business Legally

Before anything else, make sure your business is properly established.

• Form an LLC or corporation

• Get an EIN from the IRS

• Open a business bank account

• Get a business phone number, website, and email

• Register your business with local/state authorities if required

✅ 2. Open Accounts That Report to Business Credit Bureaus

Not all lenders or vendors report to business bureaus—but some do.

Start with:

• Business credit cards from banks that report

• Net-30 vendor accounts (e.g. Uline, Quill, Grainger)

• Store cards or gas cards under your business name

Use them wisely and pay on time or early to build positive history.

✅ 3. Get a D-U-N-S Number

This is a unique identifier from Dun & Bradstreet, one of the major business credit bureaus.

• Apply for free at: dnb.com

• Required by many suppliers and for applying for credit

✅ 4. Make Payments on Time (or Early)

Your payment history is the #1 factor in your business credit score.

• Pay invoices before the due date

• Set up automatic payments for recurring bills

• Check vendor terms (e.g. Net-30 means payment is due in 30 days)

Late payments can hurt your score and your credibility.

✅ 5. Monitor Your Business Credit

Use services like:

• Nav.com (free and paid plans)

• Dun & Bradstreet dashboard

• Experian Business Credit Report

• Equifax Business

Check for errors and track your score progress regularly.

✅ 6. Separate Personal and Business Finances

• Don’t use personal credit cards for business

• Don’t co-mingle funds in the same bank account

• Don’t apply for business loans with your SSN (unless required)

Keep everything clean and separate. That’s the key to building independent credit.

✅ 7. Build Relationships With Vendors and Lenders

Once you have positive payment history, reach out to vendors and lenders for larger lines of credit or financing—this helps expand your credit profile and gives your business more flexibility.

Final Thoughts: Business Credit = Business Leverage

If you want to grow, invest, or someday sell your business, a strong credit profile opens doors. Start building it now, even if you don’t need it yet—because when the time comes, it will be there.

Think of business credit as a long-term financial asset.
Treat it with the same respect and care as your personal reputation.