Why business credit matters
Lenders and vendors use business credit files from Dun & Bradstreet, Experian Business and Equifax Business to price risk. A strong file gets better terms, higher limits, and, at larger sizes, financing without a personal guarantee. A missing file does not block you, but it leaves your personal credit carrying everything.
Step 1: Make the business real on paper
- Form an LLC or corporation and get an EIN.
- Open a business bank account (see best business checking accounts).
- Get a business phone number and address listed consistently everywhere.
- Request a free D-U-N-S number from Dun & Bradstreet.
Step 2: Open vendor accounts that report
Net-30 accounts with suppliers that report to the bureaus are the first tradelines most businesses get. Buy things you need anyway, pay the invoice within a few days, and the account reports a positive payment. Three to five reporting vendors over three months creates a file. See our guide to net-30 vendor accounts.
Step 3: Add a business credit card
Once you have a few vendor tradelines, apply for a business card that reports to business bureaus. If your personal credit is thin or damaged, start with a secured business card. Keep utilization under 30% on the statement date and pay in full. See best business credit cards.
Step 4: Pay early and monitor
D&B's Paydex score rewards paying before the due date; a perfect 100 requires paying 30 days early. Check all three business reports every quarter for errors and for accounts that should be reporting but are not.
Step 5: Graduate to installment credit
After six to twelve months, a small bank or CDFI term loan, an equipment loan, or a reporting online lender such as OnDeck adds an installment tradeline. From there, larger EIN-based financing becomes realistic.