How to Build Business Credit Separate From Your Personal Credit

Business credit is a record of how your company handles its debts, tracked by business credit bureaus such as Dun & Bradstreet, Experian Business and Equifax Business. A solid business credit profile can help you qualify for financing and better supplier terms, and over time it reduces how much lenders lean on your personal credit.

1. Form a legal business entity

Register as an LLC or corporation so the business exists separately from you. Sole proprietorships are harder to separate from the owner's personal credit.

2. Get an EIN

An Employer Identification Number from the IRS is free and works like a Social Security number for your business. You'll use it on bank accounts, credit applications and tax filings.

3. Open a business bank account

Run all business income and expenses through it. Clean, separate banking is also what lenders review when you apply for funding.

4. Get a D-U-N-S number

Dun & Bradstreet assigns this free identifier, which creates your business credit file with D&B. Many suppliers and lenders check it.

5. Open trade accounts that report

Vendors that offer payment terms such as net-30 and report payments to the business bureaus are the classic way to start a credit history. Confirm a vendor reports before relying on it.

6. Pay early or on time, every time

Payment history drives business credit scores. Dun & Bradstreet's PAYDEX score, for example, rewards paying on or before the due date.

7. Monitor your business credit

Check your reports regularly for errors and to see your progress. Credit monitoring services can alert you to changes.

Building business credit takes months, not days. If you need funding while you build, products like micro business loans and revenue-based capital weigh your cash flow more heavily than your credit history.