How to Build Business Credit from Scratch: A Step-by-Step Guide for Entrepreneurs

1. Establish Your Business Legally

Before anything else, make sure your business is a separate legal entity.

Register your business as an LLC, corporation, or partnership (avoid sole proprietorships if you want to separate business and personal credit).
Get a Federal Employer Identification Number (EIN) from the IRS – this is your business’s equivalent of a Social Security number.
Open a business bank account in your company’s name to separate personal and business finances.

2. Open a Business Credit File

Once your business is legally established, it’s time to open a business credit profile.

Register with credit bureaus like Dun & Bradstreet, Experian Business, and Equifax Business.
Get a D-U-N-S number from Dun & Bradstreet (this is essential for building a credit file and doing business with large corporations or government entities).

3. Apply for a Business Credit Card

A business credit card is one of the easiest ways to start building your credit history.

Choose a card designed for businesses (many banks offer starter cards with low limits for new businesses).
Use your card responsibly – make purchases and pay your balance on time or in full.
Avoid maxing out your credit limit to keep your credit utilization low.

4. Work with Vendors That Report Payments

Not all suppliers and vendors report to business credit bureaus. So when you make purchases, choose vendors that report your payments.

Start with net-30 or net-60 accounts (which allow you to pay in 30 or 60 days) with companies like Uline, Quill, or Grainger.
Make timely payments – positive payment history will reflect on your credit reports and improve your business credit score.

5. Keep Personal and Business Finances Separate

This is a common mistake for new entrepreneurs.

Avoid using your personal credit card or bank account for business expenses.
Keeping everything separate not only protects your personal assets but also makes it easier to build and track business credit.

6. Pay All Your Bills on Time (or Early)

Just like with personal credit, payment history is the most important factor in your business credit score.

Pay invoices, credit card bills, and loan payments on or before the due date.
Some bureaus even reward early payments, so if possible, pay before the due date to strengthen your profile.

7. Monitor Your Business Credit Reports

Once you’ve started building credit, keep an eye on your reports.

Check reports from Dun & Bradstreet, Experian, and Equifax for errors or outdated information.
Dispute any mistakes – incorrect data can hurt your score.
Monitoring also helps you spot potential fraud early.

8. Gradually Apply for More Credit

As your business credit strengthens, you can:

Apply for higher-limit credit cards or lines of credit
Seek small business loans with better terms
Negotiate better terms with suppliers and vendors

Start small and increase your credit activity as your profile grows. Always use credit wisely to maintain a strong score.

Final Thoughts: Why Building Business Credit Matters

Building business credit is a marathon, not a sprint. But the benefits are worth it:

Easier access to funding
Better loan and credit terms
Protection of personal assets
Increased credibility with lenders, vendors, and partners

If you’re serious about growing your business, start building your credit from day one. With the right steps, even a brand-new company can establish a solid financial reputation.