How to Obtain Business Credit
Start-Up Business Credit
Getting business credit is an important step for any small business or startup. It helps you borrow money, buy equipment, build relationships with suppliers, and grow your company without always using your personal credit or money. Business credit also makes your business look more trustworthy and professional to banks, lenders, and vendors.
Here’s a simple step-by-step guide on how to obtain business credit:
1. Set Up Your Business Properly
Before you can get business credit, you need to make sure your business is set up as a legal and separate entity from you personally.
Steps to follow:
- Choose a business structure like an LLC or corporation.
- Register your business name with your state and get the proper licenses or permits.
- Get an EIN (Employer Identification Number) from the IRS. This is like a Social Security number for your business and is free to get at irs.gov.
- Open a business bank account using your EIN and legal business name.
2. Set Up a Business Address and Phone Number
Use a real business address (not a P.O. Box if possible) and a business phone number. You can even use a virtual business address or phone service if needed.
Tip: Make sure your business name, address, and phone number are the same across all places, like your website, Google, and legal documents.
3. Register with Business Credit Bureaus
There are several major business credit reporting agencies. One of the main ones is Dun & Bradstreet (D&B).
To get started:
- Apply for a D-U-N-S Number from D&B. It’s free and needed to build your D&B credit file.
- Also check your business listings with Experian Business and Equifax Business.
4. Open Accounts That Report to Business Credit Bureaus
Not all business accounts report your payments to credit bureaus, so choose vendors and lenders that do.
Examples of starter vendors:
- Uline (shipping supplies)
- Grainger (tools and equipment)
- Quill (office supplies)
- Crown Office Supplies
How it works: You buy products on net 30 terms (you pay 30 days later), and when you pay on time, it helps build your business credit.
5. Get a Business Credit Card
Apply for a business credit card under your business name and EIN.
Tips:
- Start with cards designed for new businesses.
- Some banks may still check your personal credit, especially if your business is brand new.
- Use the card responsibly and pay your bills on time to build credit.
6. Pay On Time – Always
Payment history is one of the biggest factors in building good business credit. If you pay late, it can hurt your credit and make it harder to borrow in the future.
Tip: Pay early when possible—some bureaus reward early payments with higher scores.
7. Monitor Your Business Credit Reports
Just like personal credit, you should keep track of your business credit.
Where to check:
- Nav.com offers free summaries of your business credit reports.
- You can also check directly with D&B, Experian, and Equifax (some may charge a fee).
Check regularly for errors, missing accounts, or signs of fraud.
8. Build Relationships with Banks and Lenders
Once your business has some credit history, it’s easier to qualify for loans, lines of credit, and other financing.
Tip: Start with your business bank or credit union. Having a good relationship can make it easier to get approved later.
Benefits of Business Credit
- Keeps your personal and business finances separate.
- Makes it easier to qualify for loans and credit cards.
- Helps you get better terms from suppliers.
- Adds credibility to your business.
Conclusion
Building business credit doesn’t happen overnight, but it’s worth the effort. Start with the basics—set up your business the right way, open accounts that report to the credit bureaus, and always pay on time. Over time, you’ll build strong business credit that can help your business grow and succeed.