Build Business Credit: Do It Now

Build Business Credit: Do It Now

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Business Credit Advantages

  • Businesses create a separate credit profile distinct from the personal credit report, significantly increasing borrowing capacity.
  • Business credit accounts often offer much higher credit limits, sometimes up to 100 times more than personal credit.
  • Business credit can be established within 30 to 90 days without requiring a personal credit check.
  • Acquiring business credit is straightforward and does not impact personal credit reports.
  • Business owners can access credit without exposing themselves to legal liability or personal guarantees, safeguarding their personal assets.
  • Having business credit enhances a company’s credibility with various stakeholders, as these credit reports are public.
  • Any business with an Employer Identification Number (EIN) and legal entity status can obtain business credit, even startups.
  • Collateral or financial documentation is not typically required to access business credit.
  • The main requirement is understanding how to structure and build business credit properly.

A business starts by creating a new credit profile, initially blank. The company receives new credit, which is reported to corporate credit rating agencies. The business establishes a positive credit record by using this credit and paying bills on time. Continual timely payments and credit usage enable the company to apply for more credit.

Here are the Three Essential Ways to Establish your Initial Business Credit Profile:

Enhance Your Ability to Secure Funding

When seeking funding for your business through establishing a business credit profile, it’s essential to understand and meet the specific requirements of credit issuers. Approval depends solely on the details provided in your application and does not consider personal or existing business credit history. To enhance your chances of approval, your application should be thorough and compelling.

Business credit card applications and automated systems make rapid decisions based on undisclosed criteria that assess your company’s fundability. These criteria encompass various factors such as your business type, phone and directory listings, address, licensing, record consistency, lending references, bank account status, online presence, and identifiers like your Employer Identification Number (EIN), D-U-N-S Number (DUNS), and Business Identification Number (BIN).

It’s important to note that even if you meet these criteria, some applications may still be rejected due to concerns about fraud. Lenders often cross-check the information provided in your application with databases from sources like LexisNexis, Dun & Bradstreet, Experian, The Small Business Financial Exchange, Equifax, and ChexSystems to verify the accuracy of your information.

Lenders commonly use important sources of information during the loan evaluation process:

Lenders often rely on LexisNexis for information on a loan applicant’s likelihood of repayment. They compare the applicant’s details with LexisNexis data during the loan evaluation process. Discrepancies between the application and LexisNexis can lead to loan rejection. LexisNexis links various personal records, including residential history, property details, contact information, legal and financial records, criminal history, marital and vehicle records, business and family information, and education and military background. This comprehensive data helps lenders assess the risk and credibility of applicants.

The Small Business Financial Exchange (SBFE) is a non-profit, member-operated organization, consisting of lenders who collect and share information on small businesses to generate detailed credit reports. These reports assist lenders in making credit decisions. The SBFE operates on a “give-to-get” basis, serving as a large, confidential repository of data, including payment histories and other business-related information. This data is vital for lenders to make well-informed lending decisions. The SBFE provides more than just payment history; it supplies comprehensive data to credit monitoring services and LexisNexis. The SBFE stores any information submitted in business loan applications, and discrepancies can result in loan rejections. Accredited Vendors like Equifax, Experian, Dun and Bradstreet, and LexisNexis Risk Solutions collaborate with the SBFE, and lenders using these Certified Providers gain access to their data and the SBFE’s extensive database.

Application rejection often occurs when there is a discrepancy with the legal name registered in state documents. To prevent this, consistently use your exact brand name in all applications. If you have a Doing Business As (DBA) filing, ensure it is used alongside your full company name. All company records, certificates, and bank accounts must share the same name. Using a risky business name can be problematic, especially if your business operates in a high-risk industry with a greater chance of workplace injuries or a higher volume of cash transactions. To enhance your fundability, avoid using a high-risk business name.

A reliable business phone number comes from a dedicated business phone line, especially for physical retail locations, and toll-free numbers are seen positively by lenders. Avoid using personal mobile or home phone numbers for your business website; consider Voice over IP (VoIP) services like Freedom Voice or RingCentral. Getting a fax number early is recommended as it signals reliability to lenders and helps manage documents. Services like Freedom Voice and RingCentral offer fax numbers that match your business phone at a reasonable cost.   A toll-free number can also boost your company’s credibility with lenders and credit issuers while establishing your business phone line.

The most reliable type of business phone number is a physical one obtained from a dedicated business phone line, especially for retail locations. Toll-free or 800 numbers are seen as a positive indicator of a company’s reputation by lenders. For your website, it’s recommended to avoid using personal mobile or home phone numbers and instead opt for Voice over IP (VoIP) services like Freedom Voice or RingCentral. Acquiring a fax number early on is advisable, as lenders view it as a sign of reliability, and it’s essential for handling important documents and credit applications. You can have faxes sent directly to your email address. Additionally, consider getting a toll-free number to enhance your company’s credibility with lenders and credit issuers until you establish your business phone number.

Lenders and credit issuers may reject your business loan and credit card applications if the business uses a home address, PO box, or UPS address. They employ algorithms and tools like Google Street View to identify residential addresses, leading to credit denial. Having a physical business address is ideal to improve your approval chances. If that’s impossible, consider using a virtual address from reputable providers like Coalition or Da Vinci.

Consider staying away from Regus virtual offices.  Regus is known for continuing to bill customers who cancel their service and ignore requests to cancel.  Then they place their customers into collections.

Renting an office or room in a well-established building can also enhance your company’s credibility with lenders, even if it’s not physically based there. Consistency in your address across online and offline business records is crucial, especially with government agencies like the secretary of state.

Business Address

Lenders and credit issuers may reject your business loan and credit card applications if you use your home address for a business run from home or a PO box or UPS address. They employ algorithms and tools like Google Street View to identify residential addresses, leading to credit denial. Having a physical business address is ideal to improve your approval chances. If that’s impossible, consider using a virtual address from reputable providers like Regis, Coalition, or Da Vinci. Renting a room in a well-established building can also enhance your company’s credibility with lenders, even if it’s not physically based there. Consistency in your address across online and offline business records is crucial, especially with government agencies like the secretary of state.

Business Website

To establish a professional online presence, you should have a well-designed website and a professional email address using a domain like “” or “” Avoid website builders like Wix or Weebly and instead use hosting services like GoDaddy. Setting up a domain and website can be done quickly, and larger hosting providers can assist if needed. Ensure your company is listed on search engines like YELP.COM, CITYSEARCH.COM, and ZAGAT.COM and registered with 411 records. Implement Secure Sockets Layer (SSL) encryption on your website for security.

When seeking a loan, the length of time your company has owned its website domain should match your domain registration (WhoIS). Your website’s search engine ranking and directory listings are essential for loan applications. Regularly update your website’s structure, backlinks, and practices to improve your company’s reputation.

Acknowledge various credit card firms on your website to build trust. Maintain consistency between public records, Secretary of State information, and your website content. Display trust and security seals like McAfee, Verisign, and TrustE on your site.

Business Email

Not having an email address or a website can make your company appear unreliable. Your email address must match your website’s domain. Using generic technical titles like and is effective. When creating your business account, avoid using popular search engines like Gmail, Yahoo, or AOL. Remember that you can forward emails from any email address to another, so there’s no need to search for a different email address.

The Office of the Secretary of State

Ensure that all significant authorities (such as the state, IRS, bank, and the national 411 directory) recognize your company with the same and exact legal names. Also, double-check that any bills you receive (e.g., electricity, internet, rent) display the correct business name and are sent to the accurate business address.

Suppose you require any licenses to operate your company. In that case, you can obtain them from the Secretary of State’s office, where you can also gather important information about potential educational requirements to maintain your license. Processing times can vary, and there may be delays in some states, so if the licensing process takes longer than 30 days, it’s advisable to initiate it promptly.

Many business credit providers mandate a dedicated business bank account to prevent accidental mixing of funds. You can usually apply for a business bank account online, even if the bank has physical branches. However, when you acquire a company, the change in ownership immediately appears on your credit report, which can raise concerns for lenders who assess your bank account start date rather than the entity’s start date. To establish a more extended business history, it’s wise to open your business bank account early as it can serve as a historical reference. Maintaining a $10,000 balance in your business bank account is recommended for those considering an SBA loan. You can swiftly obtain a business account if you already have a well-managed personal bank account. The banking system calculates your bank credit using a hidden internal score based on the average account balance over the past 90 days. To qualify for a bank loan, it’s generally necessary to maintain an average balance of $10,000 in your business bank account to achieve a favorable credit score. Larger banks like Wells Fargo and Chase consider this bank’s credit score in their lending decisions. To secure a substantial bank loan, aiming for a credit score in the low five range is advisable. Whether or not you have employees, your company must possess a Federal Tax ID number (EIN), akin to an individual’s Social Security number. Vendors typically require this EIN, making it one of the two essential elements they look for. Ensure your company is consistently identified with the same Tax ID number across all agencies, banks, and trade credit vendors. You can obtain a free EIN number for your business by visiting the IRS website. Additionally, you need to choose a legal business structure, such as a corporation, LLC, or partnership. While you might initially start as a sole proprietor, it’s highly advisable to transition to a formal business structure like a corporation to reduce liability and optimize tax benefits. It’s important to note that a “DBA” (Doing Business As) is not a separate legal entity. The procedures for obtaining an EIN and designating a business entity on are also relatively quick and straightforward.

Lenders view these businesses as particularly risky, and if your company falls into one of these categories, it can lead to immediate rejection. At the very least, you might encounter stricter underwriting, higher insurance premiums, and less favorable terms. Lenders determine the market your company operates in based on various factors, including your company code, which could be an SIC or NAICS code. It’s important to find a way to address this while remaining truthful to avoid automatic rejections based on industry codes or company names. Maintaining integrity is crucial, as it could potentially result in loan denials.

SIC Codes. The Traditional Industrial Classification (SIC) is a four-digit code assigned by the US government to classify a company’s main activities. Shareholders use SIC codes to determine a corporation’s industry. The Securities and Exchange Commission (SEC) developed the SIC code system. The first four digits broadly represent a company’s industry category, with specific subcategories indicated by additional numbers.

NAICS Codes. The North American Industry Classification System (NAICS) is a modern company classification system used to identify businesses and compile statistical data about the US economy. While NAICS is more contemporary, it’s worth noting that SIC codes, which offer greater precision, can be linked to multiple NAICS codes. For instance, the Engineering Services NAICS code 8711 corresponds to over 30 different SIC codes.

Any legal business structure can be utilized to build business credit. However, to truly separate personal and business credit, your company must exist as a legal entity, distinct from sole proprietorships or corporations. While these entities allow you to conduct business, they do not provide the same separation between personal and business credit. The timeline for establishing your business can vary based on the state of incorporation and the methods employed. Typically, online registration is faster, but there may be a waiting period even with online filing. In many cases, the filing of Articles of Incorporation is a requirement, and if you want them prepared accurately and efficiently, it is advisable to engage a business attorney.

To establish business credit, you need a DUNS number from Dun and Bradstreet, which becomes active with three or more recorded payment interactions. You can obtain a free DUNS number that takes around 30 days or opt for a faster option at $229, getting you a DUNS number within five business days or less. This expedited service includes credit reporting through DUNSFile and CreditSignal, specifically for D&B business credit ratings. It offers updates on your credit score changes and provides a comprehensive D&B company credit report.

Starting a business with an established shelf company offers financial benefits through trust, reputation, and stability. This approach provides immediate access to customers who might not have engaged with your business. The company’s age also grants swift access to suppliers, saving time and reducing the effort required to achieve business goals, thereby lowering stress associated with growth. It impresses clients, suppliers, manufacturers, sponsors, and marketers. Collaborating with an established firm can optimize financial opportunities and secure favorable lending terms, enhancing cash flow and prestige. Access to a broader range of bidding opportunities and improved competitive positioning is also possible. The organization promptly fulfills unexpected requests, simplifying sales closure and objection handling. It simplifies lease negotiations and rental agreements, reducing the risk of business losses by improving sales closure, profitability, and contract negotiation abilities.

Reports on Your Business Credit

Begin by obtaining copies of your company’s credit reports to review their contents and verify their accuracy. If you identify any inaccuracies, report them to the relevant authorities. Experian Commercial, Dun & Bradstreet, and Equifax Commercial are credit reporting agencies that offer business credit reports. These reports differ from consumer credit reports in format and content, so it’s important to examine them thoroughly to assess your company’s credit risk accurately.

Business credit reports include information such as:
  • Payment history for each account.
  • Comprehensive payment records.
  • Credit limits for each account.
  • Current outstanding balances on each account.
  • Past-due amounts, if any.
  • Terms and conditions of each account.
  • Dates when the account was reported and last updated.
  • Detailed payment information for each account.
  • Payment patterns.
  • Current assets.
  • Liabilities.
  • Working capital.
  • Net worth.
  • Sales data.

Preventing Declines in Business Credit:


The most common reason for business credit denial is the absence of an established business credit history. It’s important to note that business owners shouldn’t be discouraged by rejection since new businesses typically lack a credit history. Even without an established business rating, there is already a credit profile available from Experian and Equifax. Failing to establish business credit can lead to poor credit ratings, but simply having one monitored account can result in a favorable business credit score. You can access higher levels of business credit by acquiring additional business credit accounts. Initiating business credit accounts, often considered as trade lines, is the first step in building a business credit profile. Obtaining a company credit report will enhance your eligibility for loans, and maintaining timely bill payments will contribute to a positive credit score. The interest rates you receive are influenced by your business credit score, with stronger credit ratings leading to more favorable interest rates.

To obtain a copy of your Smart Business survey, available at a cost of approximately $49-99, visit Examine the number of trade lines that are currently reported, confirm the presence of a business credit score, verify the status of your active Experian Business Profile, and check for any recent inquiries.

You can request your Equifax Small Business Credit Report by visiting sb. It’s important to note that Equifax Small Business typically requires more time to establish a credit history than D&B and Experian. Therefore, applying with credit providers that report to Equifax is essential to build your credit profile effectively.

Establishing a credit profile with Dun & Bradstreet (D&B) begins with obtaining a Dun & Bradstreet number (D-U-N-S #), which you can acquire for free at This number also allows your company to secure loans without the need for a personal guarantor. D&B offers a package called “rolling” this into a kit, costing $2,000 or more. Alternatively, you have the option to subscribe to DNBi SelfMonitor to monitor the development of your credit.

Factors affecting business credit scores include:

Business credit scoring primarily emphasizes payment history. Personal credit consists of five main components:

  • Payment history (35%)
  • Utilization (30%)
  • Credit mix (10%)
  • Length of Credit History (15%)
  • Accumulation of new credit (10%)

These percentages are significant because efforts to improve one aspect of your FICO score may negatively impact another. Achieving a credit score 800 typically takes individuals until they reach their 40s or later. In contrast, business credit strongly emphasizes payment history, where your Dun and Bradstreet ranking is determined by how promptly you make payments.

Examples of payment performance and corresponding scores for business credit are as follows:

  • Early payment: 100
  • Prompt payment: 80
  • Payment received 14 days beyond terms: 70
  • Payment received 21 days beyond terms: 60
  • Payment received 30 days beyond terms: 50
  • Payment received 60 days beyond terms: 40
  • Payment received 90 days beyond terms: 30
  • Payment received 120 days beyond terms: 20

Business credit scoring primarily emphasizes payment history. Personal credit consists of five main components:

When reviewing and comprehending your credit reports, it’s essential to recognize that consumer credit assessments and business credit reports are not identical. Business credit reports typically include five distinct risk ratings, each assessing risk through different criteria. Among these ratings, the PAYDEX score holds particular significance in the business domain, as it exclusively evaluates payment history and differs somewhat from user ratings.

The PAYDEX score, a dollar-weighted numeric rating provided by D&B, evaluates a company’s payment performance in the previous year. D&B calculates this score by considering trade interactions reported by various vendors. The PAYDEX score ranges from one to one hundred, with higher scores indicating superior payment efficiency. In essence, PAYDEX scores depict a company’s commitment to paying its bills promptly.

The PAYDEX score gives greater importance to larger bills in its calculation. It computes a dollar-weighted average number of days a company takes to pay its bills using data from participants in the D&B Global Trade Exchange. According to D&B, businesses should use this score for assessing risks. D&B gathers payment data from retailers and distributors with whom a company conducts business. Each interaction is distinct and showcases how bills are managed concerning the agreed-upon terms. The PAYDEX score is based on a maximum of 875 payment experiences, with up to 80 representative payment experiences documented in the company’s credit report.

D&B has established risk categories to simplify the interpretation of PAYDEX Scores:

  • PAYDEX 80-100: Low risk of late payment
  • PAYDEX 50-79: Moderate risk of late payment
  • PAYDEX 0-49: High risk of late payment

D&B proactively notifies you of score changes that may move you into a different risk category.

Addressing any issues with your PAYDEX score is beneficial. If your company consistently pays bills late, consider improving organizational and time management practices. Hiring an accountant or implementing strategies like setting bill payment reminders on your computer might be helpful. Since the dollar amount of payments influences PAYDEX Scores, prioritizing larger bills can be more cost-effective. Consistency in adhering to a payment schedule can positively impact your company’s PAYDEX Score.

The most cost-effective report for obtaining a quick overview of a company’s financial health is the Corporate Information Report, currently priced at $139.99. You can also acquire a Customer Details Report for your business or one you are contemplating doing business with. The D&B Market Details Summary offers insights into trade fees, specific trade line details such as dollar amounts and terms, legal matters, company events (usually covering ownership and management changes), and a detailed company hierarchy with ownership details, in addition to your PAYDEX Score. Furthermore, a Business Intelligence Study encompasses a Risk Appraisal Review, presenting an overall credit recommendation, PAYDEX ratings, Delinquency Predictor percentile, Financial Stress percentile, and Supplier Evaluation likelihood in a concise Risk Assessment Summary.

Credit records for businesses may not always be entirely accurate, and verifying them regularly is crucial. While major credit monitoring organizations like D&B aim for consistency, errors can occur. D&B offers CreditMonitor, usually priced at $39 per month, for monitoring your company’s credit reports with them. You can find this service at

Managing business credit across multiple agencies can be costly. Experian offers the cost-effective Enterprise Credit Advantage Membership Package at $189 per year. You can get the Business Credit Advantage Subscription Plan at

Equifax provides Equifax Complete, starting at $19.95 per month after a 30-day $4.95 introductory offer. You can purchase Equifax Complete at

Totaling the annual costs of these plans, it comes to $468 for D&B, $189 for Experian, and $224.40 for Equifax, making it $881.40 in total.

If inaccuracies are negatively impacting your PAYDEX score, rectifying these inaccuracies will lead to an enhancement in your PAYDEX score. To obtain a Business Information Report from D&B, visit: In case you find any errors or incomplete information after updating the Business Information Report, make the necessary corrections. You can accomplish this at D&B by visiting:

D&B requires verification before adjusting your company credit scores. You will likely need to write a letter addressing inaccuracies in your company credit audit. Include duplicates of all supporting documents, such as receipts and canceled checks. Instead of sending originals, provide copies while retaining the original documents. Correcting errors in your credit report also involves explaining the charges you wish to dispute. Make the dispute as clear and straightforward as possible. When sending your dispute by mail, use certified mail to obtain proof of delivery. Keep a record of the topics discussed in your written communication. D&B advises incorporating payment experiences documented by D&B Customer Service, whose contact number can be found at:

Obtaining Approval for Vendor Credit

Credit Line Hybrid:

The initial step in establishing business credit is to apply for a credit line hybrid, a type of business credit requiring a personal guarantee and a credit check. Credit line hybrids offer the advantage of obtaining high-limit credit lines without a financial review, cash flow assessment, or collateral. These credit line hybrid reports are reported to business credit rating agencies. This approach allows you to establish initial business credit using actual funds and gain access to credit lines of up to $150,000 with a zero percent interest rate for 18 months. Startup businesses and credit partners are encouraged to apply. The Credit Line Hybrid also offers enterprise and regular credit cards with consolidated financing.

D&B Credit Profile:

D&B Credibility presents a specific method for initiating a company credit profile, though it’s not the only approach available. They may attempt to persuade you that it’s the sole method, even though it isn’t. Their service, which involves adding tradelines to your credit report based on new creditors, may cost you up to $2,000. This process is time-consuming and typically only reports to D&B. Furthermore, it may exclude various financial aspects such as bank credit, mortgages, rent, mobile phone bills, or utility bills. This service does not extend additional credit; it merely adds the same creditors. Unsecured Business Financing: This option allows you to leverage your strong personal credit and doesn’t require you to shy away from providing a personal guarantee. It provides you with tangible cash credit cards like Visa, MasterCard, or AMEX. Unsecured Company Lending enables you to borrow up to $150,000 at a zero percent interest rate for 6 to 18 months. You will receive five to eight authentic credit lines that are reported to business credit bureaus. Guarantors and newly established companies are encouraged to apply. You can explore unsecured business financing by visiting

Vendor Credit Accounts:

Another option for establishing initial business credit is through vendor credit accounts. Vendors are creditors who offer terms like Net 30, allowing you 30 days to pay the bill in full. When you purchase goods from these trade vendors, they extend business credit to you. However, it’s essential to note that approximately 97 percent of trade vendors do not report to commercial credit reporting agencies. Therefore, when building business credit from scratch, it’s crucial to identify vendors that do report to business credit bureaus. Consider starting with vendors like Quill, Grainger, and Uline Strategic Network Solutions to initiate your business credit profile. Acquire credit from these companies and only use it until you’ve paid the bill and received the items. These vendors will then report your trade lines to corporate credit rating services, allowing you to establish trade credit.

How to Obtain Vendor Accounts:

If your business lacks prior credit history, you’ll need to commence with vendor accounts to establish credit. Suppliers offer These accounts that grant you initial credit, even if you are a startup. Vendor credit is reported to business credit reporting agencies, enabling you to build business credit while obtaining actual credit. Starter vendors are willing to extend initial credit even if you have no credit, no credit score, or no trade lines. However, it’s important to note that most retail stores, such as Staples, do not offer initial starter allowances.

True Starter Vendors:

  • Quill Office Supplies: Quill Office Supplies specializes in office, packaging, and cleaning supplies. They provide credit information to D&B. You’ll need to place an initial order to establish credit with them. If you have no prior credit history, you may need to place up to three orders of $50 or more for them to approve your account.
  • Gempler’s/Office Depot: These suppliers offer work-related supplies and products. They report corporate credit to D&B. You typically need to initiate a $50 order and select the “Invoice me” option. They will then assess your credit. If you’re not eligible for Net 30 terms, you can prepay for your orders and continue using the “invoice me” option until you gain approval.
  • Reliable Office Supplies: Reliable Office Supplies specializes in office supplies and promotional items. They provide updates to D&B, Experian, and Equifax. To establish credit, you’ll need to place an initial order and choose either invoicing or billing to the company. You can continue purchasing with this payment method if you are not immediately approved for Net 30 terms. Your chances of gaining Net 30 terms increase with the volume of orders placed.
  • Uline Shipping Supplies: Uline Shipping Supplies offers a wide range of shipping, packaging, and industrial equipment. They report corporate credit information to D&B. To qualify for Net 30 terms, you will need your DUNS number, two references, and a bank reference. Initial orders may need to be prepaid.
  • Monopolize Your Marketplace: Monopolize Your Marketplace offers a comprehensive 10-audio CD set covering marketing and business topics. They provide credit information to Experian. While checking out, you can select the “4 equal payments of $59.99” option. Your first payment will be charged after 30 days. To qualify, you should have a business bank account, an EIN number, and a valid shipping address. Reporting your business credit may take 30 to 60 days.
  • Strategic Network Solutions: This vendor provides customer credit updates to Experian. To open an account, you will need a DUNS number, a business license, and an EIN number.
  • Summa Office Supplies: Summa Office Supplies reports corporate credit information to D&B and Equifax. They typically require a minimum purchase of $75 to report business credit. To qualify, you’ll need an EIN number, a valid business address, a business license if applicable, a business bank account, and a DUNS number.
  • Wells Fargo: Wells Fargo offers a secured credit card designed to help you establish credit for your business.
  • Behalf: Behalf offers financing solutions for its customers. They share company credit reports with Experian, Equifax, and D&B.