Seven Ways to Build a Business Credit

Building a business credit helps you get approved for low-rate business loans by lowering your business insurance premiums. Strong business credits can lower your insurance premium or interest rates.

One must know how to run a credit check on a business. By doing so, you can get approved for a lease, business loan, and business line credit. Establishing a business credit avoids a personal guarantee, which prevents you from taking personal liability for your business.

Since we’ve reviewed the potential benefits of business credit, here are the seven ways to start building and managing business credit:

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  • Checking business credit
  • Establishing business credit
  • Applying for business credit card
  • Working with vendors that report payments
  • Paying those vendors early
  • Using your business credit to manage your cash flow
  • Monitoring your business credit reports

Checking Your Businesses Credit:

  • There is no legal requirement for the bureaus to give you free access to your business credit reports like your personal credit reports.
  • Most business credit bureaus will give you your business credit report for a fee.
  • There can be multiple credit scores.
  • Different agencies create and sell different credit scores.
  • Some lenders and vendors come up with new business credit reports when evaluating your business.
  • In some cases, the lenders check the personal credit or business credit while the others check both the personal and business credits.
  • Therefore, having both good business and personal credit is necessary.

Establishing Your Business Credit:

  • Your business has not been established well when you find nothing while checking your business credit reports.
  • Using your credit card for business purposes can lead to this situation where all the credits wind up on your credit reports.
  • There are business-scoring models that rely solely on business credit reports.
  • Hence you must have an established business credit report.

To establish business credit, you may need to take the following steps:

  • Incorporating your business or forming a Limited Liability Company ensures your personal and business identities are separate.
  • Getting a federal employer identification number is a free service by the IRS and helps identify a business entity.
  • Open a business bank account by using a legal business name.
  • Get a business phone line listed under your business name.

Public records like legal filings, liens, and your business’s size and industry. On-time and early payment histories can get you a long way in creating a strong financial track record.

Applying for a Business Credit Card:

  • There have to be vendors who report your payments to the credit bureaus when you decide to have a business credit profile.
  • Business credit cards offer benefits that are more helpful than a personal credit card.
  • Therefore, business credit cards can be a good start for these reasons.

Working With Vendors That Report Payments:

  • Opening accounts with vendors that report your payments to the bureau might help build your business credit.
  • Make sure your vendors report your payments to the bureau. If not, try to open new accounts with vendors who report your payments.
  • By reporting your payments with the help of vendors, your business credit can be built.

Paying those vendors early:

  • Some business credit scores range from I to 100, on which 100 is the highest score possible to gain.
  • Your payment history with the vendors determines your business credit score.
  • Paying on time might get you a good score, while paying early in order to get the highest score is one thing the business owners fail to realize most times.

Using Your Business Credit to Manage Your Cash Flow:

  • You can become eligible for lower rates and better terms when you build a business credit score, which helps you manage your cash flow.
  • Credit cardsoffer more flexible and financing options than other types of quick funding.
  • A credit card’s grace period besides avoiding interest charges accrued interests.
  • The interest rate may be higher than you would pay on your credit line when you revolve your credit card.

Monitoring Your Business Credit Reports:

  • Deceitful activities might impact your business credit.
  • They make it difficult to borrow money.
  • Check your business credit reports for errors often.
  • You can rectify the errors by filing a dispute with the respective bureau.


Business credits and personal credits are not the same in spite of the similar purposes they serve. Even though some business credit scores consider personal credits, they are separate from the business credit profiles.

It’s important to start building your business credit early as it takes time. It is always safe to have a business credit, which gives you a safety net in the future. Building your business credit helps you maximize your opportunity for business growth and reputation. It also helps you separate personal credit risks from business credit risks.

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