Table of contents
Businesses that grow tend to be businesses with good credit. That’s news to few.
A solid business credit score lets you call the shots with lenders. You get access to the capital you need, on terms that actually work for you. That’s how you unlock real financial growth.
Below, we’ll walk through how to build, monitor, and use your business credit in a way that actually supports your goals.
What is business credit?
Business credit works a lot like your personal credit score, but it’s all about the business itself. It’s built from things like your company’s credit history, trade relationships, financials, public records, and even any personal finances tied to your business. So, think about how your personal credit works. Then picture the business side being tracked by the big bureaus: Dun & Bradstreet, Experian, and Equifax. They’re the ones keeping score.
Unlike personal credit, business credit evaluates the creditworthiness of your business itself. It reflects your company's ability to repay debts and is critical for accessing loans, securing favorable terms from vendors, and attracting investors.
Why is your business credit important?
- Access to funding: A good business credit score makes it easier to secure your loans with favorable terms and higher credit limits.
- Operational benefits: When your credit looks good, you’ve got more leverage. You can negotiate better terms with suppliers and vendors.
- Financial security: When you split your personal and business credit, you’re protecting your own assets and taking a lot of the personal risk out.
- Growth opportunities: It sets the foundation for your future expansions, enabling you to leverage investment opportunities as they come up.
How to build your business credit fast
Building your business credit requires a strategic approach that works for your business's unique needs and circumstances. Here’s how you can get the ball rolling:
Register your business
First, establish your business as a legal entity by registering it as an LLC, corporation, or other formal business structure. This step matters because you can only build business credit once your company is officially registered.
Steps to register:
- Choose a business structure: Decide between an LLC, corporation, or partnership based on your company’s needs.
- Obtain an EIN: Apply for an Employer Identification Number (EIN) through the IRS, which acts like a Social Security number for your business.
- Register for a DUNS number: A DUNS Number from Dun & Bradstreet is often required by suppliers and creditors. It helps establish your business’s credit profile.
Open a business bank account
Once your business is officially set up, the next move is opening a separate business bank account. Think of this as laying down a clean financial foundation. It makes everything easier to track.
Benefits:
- Financial tracking: Keeps your business transactions organized.
- Establishes credibility: Demonstrates that your business is a legitimate entity.
- Builds financial history: A business bank account forms the backbone of your credit profile.
Obtain a business credit card
A business credit card helps in establishing a credit history for your company. They are more than just a spending tool; it also helps you smooth out cash flow and track your spending.
Tips for effective use:
- Regular usage with prompt payments: Use regularly and pay off your balance in full to avoid any interest charges you might accrue. You can also ramp your credit score back up.
- Monitor credit utilization: Keep a low credit utilization ratio so that it positively impacts your score.
Work with vendors who report payments
Make sure you’re working with vendors who actually report your payment history to the credit bureaus. This is one of the easiest ways for you to build your credit score, and a lot of small businesses miss out.
How to choose the right vendors for you:
- Ask about reporting: Before you sign anything, just confirm whether the vendor reports payments to the credit agencies.
- Prioritize legacy vendors: Incorporate the vendors who offer the most favorable terms and report consistently.
Manage your credit and payments
Staying on top of your credit is something you’ll want to build into your routine.
Best practices:
- Regular credit checks: Use the free tools and services available to you so you always know where your business credit score stands.
- Address errors immediately: If something doesn’t look right, dispute it quickly with the credit bureaus to keep your report accurate.
- Maintain timely payments: Make sure your payments to creditors and suppliers are consistently on schedule
Monitoring and improving your business credit scores
Monitoring your business credit means keeping an eye on your credit reports and scores, your trade lines, public records, and any alerts. By checking these regularly, you can catch errors, spot signs of identity fraud, and notice trends early.
Steps to monitor business credit
- Identify the major business-credit sources: Typical providers: Dun & Bradstreet (DUNS), Experian Business, Equifax Commercial (and industry-specific reporting services).
- Claim / register your business profiles: Create/verify accounts at each reporting agency so you can access reports and set alerts. Note: some require a DUNS or EIN to claim.
- Gather baseline reports: Pull an initial copy of each business credit report and score. Save copies and note the report date.Then, record all trade lines (vendors, loans, credit cards), public filings (UCCs, liens), and any negative entries.
- Set up automated alerts: Enable email/SMS alerts for changes: new credit inquiries, new trade lines, new public filings, or score drops. If the bureau offers daily/weekly monitoring, subscribe.
- Build a monitoring cadence
- Daily/Real-time: Critical alerts (new inquiries, new tradeline, UCC filings, large balance changes).
- Weekly: Quick scan of alerts and outstanding invoices.
- Monthly: Review full reports, check new accounts opened or inquiries, reconcile activity vs. filings.
- Quarterly: Deep audit — download full reports, verify trade line details, and review public records.
- Annually: Formal review before major financing decisions — dispute any remaining errors and renew preventative measures.
- Reconcile trade lines and payments: Match what’s listed on reports to your accounting records and bank statements; verify vendor payment terms and that on-time payments are being reported.
- Watch for red flags such as:
- New credit inquiries you didn’t authorize.
- New trade lines/accounts you didn’t open.
- UCC liens, judgments, and bankruptcies.
- Sudden score drops or big balance increases.
- Mismatched business name, address, or phone (may indicate misreporting or fraud).
- Dispute inaccuracies quickly: Use the bureau’s dispute portal or mail a written dispute with supporting documents (invoices, paid receipts, court records). Keep records of dispute IDs and outcomes.
- Protect your identity: Limit who has the authority to open credit on behalf of the company.
Use strong internal controls for vendor setup, payments, and corporate cards. - Document everything: Keep a monitoring log for dates, action taken, person(s) responsible, and outcome for each alert or dispute. Store copies of correspondence and final resolutions.
Strategies to improve your credit score
- Strengthen your credit mix: Diversify the types of credit your business uses without exceeding manageable levels.
- Lower your credit utilization: Increase your credit limit by requesting it from credit providers without increasing your debt.
- Extend your trade credit: Build strong relationships with suppliers that offer credit terms, allowing you to negotiate better terms and demonstrate reliability.
- Ask for higher credit limits: Increasing the amount of credit available to you naturally lowers your utilization ratio.
- Pay down balances early:Try paying down your revolving balances before the statement closes. This reduces the debt that actually gets reported.
- Add trade references to your Dun & Bradstreet file, this helps build depth in your credit history.
- Leverage small credit-builder loans or secured cards if rebuilding credit from scratch.
Keep your cash healthy: Lenders look at how consistently you pay, so maintaining steady cash flow is key.
Final thoughts
Building business credit is one of the smartest moves you can make for your company’s long-term stability and growth. When you take these steps, you’re giving yourself the financial backbone to handle surprises and take advantage of opportunities as they come.
As you continue to grow, keep coming back to these practices and adjust them to fit where you are and where you’re headed. Let this be the stepping stone to a financially robust and confident future for your business.
ABOUT THE AUTHOR
With over a decade in business lending, Josh leads National Business Capital’s advisor team as EVP of Sales. Having personally structured thousands of funding arrangements, he simplifies the lending journey and guides clients through approvals, capital stacks, funding timelines, and the key questions to ask before signing.
