How to Build Credit for Your Business

Posted: 4th July 2016 07:53

Building credit for your business is a critical undertaking that takes time and effort, but it’s a process that pays off.

When building credit for your business you’re creating a credit line that’s separate from your personal credit. While many sources will claim that business credit is an excellent way to conceal bad personal credit, this is not necessarily true. Actually, it’s usually important for a business owner to have good personal credit in order to establish a business credit line.

Today we will go over of the ways to build business credit so you can have a successful future.

Take Care of Your Personal Credit Rating

Many banks will largely consider your personal credit rating to initially lend your business money. To boost your credit score:

Furthermore, lenders will often evaluate the personal credit of any business partner or investor with over 20% stake in your business.

Apply For Credit Before You Actually Need It

In order to begin building your business’ credit history, consider applying for some kind of credit soon after establishing the business. A small business may have to establish itself for at least two years before a bank feels comfortable providing a considerable credit line, but there are usually ways around that. You can get a business credit card or apply for a small bank loan.

If it proves difficult scoring even a small loan, you can open a store-based credit line and get a small secured credit card that has a low limit. Furthermore, there are some major retailers who offer commercial credit accounts to small business, which can help establish a credit profile for your business.

Ensure Your Public Records Are Clean

Besides detailing your business’ history of repaying creditors, your business credit report will also have every public record filed in your business’ name, including judgements, liens, and bankruptcies.

Any negative mark on your business credit report will haunt you. Bankruptcies, for instance, remain on your Experian credit score for almost 10 years; judgements, tax liens, and collections stay for nearly seven years. If you happen to have commercial debt, it’s in your best interest to pay it off and going to a trustworthy debt settlement company can improve your business credit score.

Establish Trade Lines with Suppliers

If you buy any stuff from third-party vendors, such purchases might help build your business credit. Most suppliers extend business credit, meaning that they give you a number of days or weeks to pay after receiving the inventory. If you’ve this kind of accounts-payable relationship, request your supplier to forward your payment history to a credit bureau. This will boost your business credit score so long as you don’t breach the trade agreement terms.

You need not less than three trade lines to obtain a Dun & Bradstreet Paydex score that measure past payment history. If you don’t work with many suppliers, you can set up trade lines with any small vendor. If your small vendors don’t report to a credit bureau, list them as trade references - Dun & Bradstreet will follow up to get your trade data.



Good business credit is the vital spark to your business. It makes a world of difference in terms of how much capital you’ve access to, the interest rate you receive, among other advantages. Hence, follow these tips to build your business credit.