Build Your Business Credit from Scratch

Building your business credit has a lot of perks. Not only do you slowly increase your borrowing power to help with any large-expense needs in the future. It may help demonstrate stability to insurers, open the door to flexible terms that can increase the payment window, and positively affect reputation with current and future creditors.

1. Make sure your business has its own EIN (Employer Identification Number) and consider a DUNS (Data Universal Numbering System) number from Dun & Bradstreet, so credit can be reported correctly.

2. Open accounts with suppliers that report on your company’s payment history to credit bureaus. Some vendors will accept a lack of credit history and offer what is called a net-30 account, which will allow you 30 days to pay your invoice.

3. Apply for a business credit card with an issuer who reports activity to the business credit bureaus. This might be the easiest way to build credit, if you already have a good personal credit score, though many issuers require a personal guarantee.

4. Always pay on time, or early! You will hurt your credit profile if you’re late. Paying on time can help increase your future borrowing amount.

5. Monitor your credit reports and keep them free from errors. Credit reporting mistakes happen, and it is important to stay ahead. Even businesses experience identity theft!