Building Business Credit from Scratch: 6 Steps to Take

Here's how Americans increased their FICO scores last yearEstablishing business credit is an important step for any small business owner. Good business credit can help you qualify for loans and lines of credit, get better terms with vendors, and improve your chances of being approved for a lease. Plus, it can help you build credibility with your customers. If you’re just starting out, though, you may not have any business credit to speak of. Luckily, you can take a few steps mentioned by to start building your business credit from scratch. 


Here are the steps:


  1. Open a company bank account and obtain a company credit card.

One of the first things you should do when setting up your business is open a business bank account. This will assist you in keeping your personal and corporate money separate, which is necessary for accounting and tax purposes. Once you have a business bank account set up, you can apply for a business credit card. When you use your business credit card to make purchases and pay your bills on time, you’ll start to build up positive payment history, which is one of the biggest factors in determining your business credit score. 


  1. Get an EIN number from the IRS. 

Another important step in setting up your business is obtaining an Employer Identification Number (EIN) from the IRS. You can use this number to open a business bank account, apply for a business credit card, and, more importantly, establish business credit. 


  1. Register with Dunn & Bradstreet. 

Dunn & Bradstreet is one of the main sources that lenders and other businesses use to check your company’s financial history and Credibility. When you register with Dunn & Bradstreet, you’ll be assigned a D-U-N-S number, which is like a social security number for businesses. This number is used by businesses all over the world to track how often companies pay their bills on time, how much they owe creditors and other important factors that affect their ability to repay debts. 


  1. Start building positive payment history—and pay on time! 

Once you have a D-U-N-S number, creditors will start reporting your payments to Dunn & Bradstreet (as long as they’re made on time). That’s why it’s so important to make sure you’re always paying your bills on time—it’s one of the best ways to build positive payment history and improve your chances of being approved for loans or lines of credit in the future.


  1. Use vendor lines of credit wisely—and don’t max them out! 

If you have good relationships with vendors or suppliers, ask if they offer lines of credit that can be used for inventory or other purchases related to running your business—just be careful not to max them out or make late payments that could damage those relationships (and consequently affect future lines of credit).


Conclusion: These six steps will help you get started on building strong business credit from scratch—which can pay off in spades down the road when it comes time to apply for loans or lease commercial space for your growing company! Just remember: always pay your bills on time (or early), don’t max out lines of credit extended by vendors or suppliers, and regularly check in on your company’s report with Dun & Bradstreet so you can identify any potential problems early on and take steps to rectify them before they do too much damage!