How to Build Business Credit from Scratch

Why Business Credit Matters

Business credit is separate from your personal credit score. A strong business credit profile:

• Increases your chances of loan approval
• Gets you better interest rates
• Allows you to borrow without personal guarantees
• Separates personal and business liability

Step-by-Step Guide

Step 1: Establish Your Business Entity

• Form an LLC or corporation (not a sole proprietorship)
• Get an EIN from the IRS
• Open a business bank account

Step 2: Register with Business Credit Bureaus

• Get a DUNS number from Dun & Bradstreet (free)
• Register with Experian Business and Equifax Business

Step 3: Establish Trade Lines

• Open net-30 accounts with suppliers (Office Depot, Uline, etc.)
• Make purchases and pay early — not just on time
• Start with 3-5 trade lines

Step 4: Get a Business Credit Card

• Apply for a business credit card in your business name
• Use it for regular expenses and pay in full monthly
• Keep utilization below 30%

Step 5: Monitor Your Profile

• Check your business credit reports regularly
• Dispute any errors immediately
• Track your PAYDEX score (aim for 80+)

Timeline

Building strong business credit takes 12-24 months. The key is consistency — every on-time payment helps.

Common Mistakes

• Using personal credit instead of business credit
• Paying late (even one late payment can drop your score significantly)
• Not monitoring your reports for errors
• Maxing out credit lines

Start building your business credit today — your future self will thank you when it's time to apply for funding.