Building Business Credit

Establishing A Business Identity

During our nearly thirty years in the business credit industry, we have been asked countless times: how can small businesses build their business credit? While there is no shortage of resources on the subject available to business owners, we would be remiss if we didn't share our thoughts on how to establish and build business credit.

Before we discuss credit reports, let's touch on some basics for establishing your business' identity:

  • It's recommended to form an LLC or corporation and establish an Employer Identification Number with the IRS.
  • Open a business bank account and establish a business phone line using the company's identity.
  • Having an identity separate from that of the business owner not only protects the business owner from liability, it shows the world that the business is legitimate.

Business Credit Bureaus

Just as there are credit bureaus that gather information on nearly every consumer in the United States, there are credit bureaus that collect and provide information on businesses. The three largest are: Experian, Dun & Bradstreet and Equifax. There are also smaller, industry specific, or regional credit repositories.

These credit bureaus build credit profiles on businesses when lenders and other credit issuers report the payment behavior of their credit customers. When companies pay their bills on time, this timely payment activity is reported to the credit bureaus. Likewise, when a company is late on its bills, that poor payment behavior is also reflected on the company's credit record. Each credit bureau has their own credit scores on businesses which are powered by the business' credit profile.

Lenders, supplier, and sometimes even customers use the company's credit profile and scores to make credit decisions on the company. Companies with good credit receive lower interest rates, higher credit limits, and better terms from suppliers and lenders than companies with poor credit.

How to Build Business Credit

So, how do companies build strong credit profiles that suppliers, lenders, utilities, and insurance companies will view favorably? One easy way to start is to open a couple of business credit card accounts. Accounts for commercial gas cards, charge card accounts from big-box retailers and regular business credit cards are usually reported to the business credit bureaus and are a great way to start building credit. Establish a credit line with suppliers and ask if they report their trade data to the credit bureaus. If they don't, have them visit us at We can help them report your trade data to all three big credit bureaus for free. In order to get credit lines, you will need to have credit history. There are a couple of additional resources that help small businesses establish their credit.

eCredable helps budding businesses establish credit by pulling in 24 months of credit history from telecom, internet and utility providers. They then report that payment history to the credit bureaus so it will appear on your business credit report.

Learn More About eCredable

Dun & Bradstreet offers DUNSFile to new businesses looking to establish credit. DUNSFile is a program that helps establish a D&B credit record and D-U-N-S Number in just a few days.

Finally, and most importantly: pay all your credit related bills within terms. It's great to have a credit report in place, but if that credit report shows unreliable payment behavior, it won't help your business any. Suppliers and lenders will require strict terms or may not want to issue a credit line at all.

Following all of the suggestions listed above will quickly build a strong credit profile for your company.