Build Your Business Credit Score with These Simple Steps

Picture of Katie Fleming

Katie Fleming

Co-founder and COO of Owner Actions

A person sits happily looking at a computer after watching his business credit score improve.

Lenders, creditors, suppliers, and insurance companies may be looking at your business credit score. Why? Often, it’s to check on your ability to make and meet payment obligations. And, sometimes, it’s to understand some of the risks that come from working with your business. They may make credit decisions; set interest rates, premiums, and credit terms; or establish prices based on what they find.

Other parties care about your creditworthiness, too:

  • Your large-volume prospects may opt out of working with your business if it can’t demonstrate financial stability or creditworthiness. Many believe these indicators will impact your ability to attain the supplies or resources you need to produce your end product (or to do so affordably).
  • Organizations interested in forming strategic partnerships may base their decisions on your credit score and means to access capital.
  • And one day, potential buyers of your business may decide whether to make a full-priced offer, a very low offer, or no offer at all based on what they find in your credit report.


For these reasons, poor credit—or a lack of credit—can be detrimental to your business. In this guide, you’ll learn how to build it.

But first…


What is a good business credit score?

Dun & Bradstreet says a score of 80 or higher is a good business credit score. Experian looks for a score of 76 or above. Equifax says 90 or above is a good credit score. FICO reports that scores of 160 or above are good. Each uses a different barometer and scoring system to evaluate a business’s credit score.


How can I start building business credit?

It can take time to establish and build credit, but there are actions you can take to help you with these goals.

First, you’ll need to establish a business credit file. You can take on this task by completing these important steps:


Establish your business as a separate legal entity

Businesses must be structured as an LLC, LLP, or corporation to be considered a distinct legal entity from an owner or founder. This is important because it allows owners/founders to keep their business and personal finances separate, and it allows businesses to establish credit that’s separate from the owner.

Sole proprietorships do not allow for this distinction. Business activity conducted through a sole proprietorship is tied to the individual owner and reflected on that person’s credit report rather than the entity’s. Owners who opt for this structure can suffer when they make a financial misstep in their business; the effects will not only harm the business’s ability to attain credit, but it can also decrease the owner’s likelihood of getting approved for personal loans, lines of credit, and credit card accounts.

If keeping your business’s credit separate from your own is important to you—and there are many reasons it might be—you should consider establishing your business as a distinct legal entity. You can learn more about structuring your business in one of these ways in our article, Small Business Basics: Choose a Business Structure.


Apply for an employer identification number (EIN)

Once you set up a distinct operating structure, you can obtain a federal tax ID number (commonly called an employer identification number, or EIN). This number is necessary for filing your business’s tax returns and applying for licenses and permits, as well as opening business bank accounts, establishing accounts with large vendors, securing contracts, and applying for credit.

You can visit to get started or read the guide below to learn more about the process:


Obtain a D-U-N-S number

You may want to register with Dun & Bradstreet to attain a D-U-N-S number that’s unique to your business. This number is essential for businesses that plan to secure federal contracts or government grants, but it is also a means for business credit bureaus to identify a business’s credit activities and payment patterns. Once a D-U-N-S number has been issued, major credit agencies can open a credit file for your business and begin establishing its credit rating.

You can obtain a free D-U-N-S number for your business at


Open a bank account in your entity’s legal name

The next important step is to open a business bank account. This step will help you create a clear distinction between your business and personal assets and expenses, attain credit from that bank or any other lender or creditor, and earn a reference point on credit applications your business may need for future credit approvals.

You can establish a business bank account at most commercial and community banks and credit unions using your business’s legal name. Learn more about the process in our article, Small Business Basics: Attaining a Business Bank Account.



Next, you’ll start building your credit file. This step can be as simple as establishing accounts with multiple vendors (especially those that offer net terms and report to major credit bureaus) or opening a business credit card with a company that reports to the credit reporting agencies.

Both options allow your business to make purchases and enter arrangements for repayment. This is important because consistent, on-time repayment is a key factor in building business credit.

Keep the following tips in mind as you establish credit accounts:

  • When possible, choose to work with creditors that report to the major credit agencies. This will help you ensure that your positive credit behaviors are reported and used to boost your business credit score.
  • If you must work with vendors that don’t report to the major credit agencies, ask them to consider becoming a trade reporter. They can realize some benefits for doing so, such as becoming a supplier, vendor, or creditor of choice for small businesses.
  • Your business’s credit score won’t increase through normal payment terms with vendors. Instead, you must ask for net 10, net 20, or net 30-day credit terms that will help you demonstrate your ability to follow repayment schedules.
  • Repay lines of credit with your business checking account rather than your personal accounts. This is an important way to demonstrate the distinction between your personal and business finances that’s needed for your business to be considered a standalone entity.


To learn more about opening a business credit card, read our article, Small Business Basics: Attaining a Business Credit Card.


What else can I do to boost my business credit score?

There are a few more steps you can take to build and boost your credit score:


Monitor your credit

Errors can occur, including those that will harm your business’s reputation with lenders, so it’s important to catch and dispute mistakes as quickly as possible. For many, these mistakes include attributing a similarly named business’s accounts with their own, mistakes in the years in which an entity has been in business, and a third party’s opening of fraudulent accounts. You may even find instances of personal credit concerns showing up on your business credit report or the opposite: business credit accounts and remarks showing up on your personal credit report. You can dispute errors by contacting the credit reporting bureaus that report them directly.

To obtain business credit reports, you can contact the following credit bureaus. Expect to pay a nominal fee to receive each report.

Each credit bureau uses a different formula to calculate business credit scores. Be sure to check all three reports regularly to know where your business stands.

Keep your information current

When you log in with each credit bureau, review the information they have on file for your business. Pay special attention to the accuracy and completeness of your information. Gaps and mistakes can reduce your credit score and impact the terms you receive from creditors who may check the report.

Need to make changes or dispute errors on your report? Contact the credit bureau directly for the steps you’ll need to take.


Pay your balances in full when possible

By paying in full, you can keep your credit utilization (the amount of available credit you’re using) low. This is important for keeping your business credit score as high as possible. Most creditors prefer to see businesses use no more than 30 percent of their available credit; lower utilization can help you secure better terms.


Make early payments

Some credit scoring models, such as Dun & Bradstreet’s PAYDEX Score, reward businesses that make early payments even more than those that pay on time.


Build credit diversity

Lenders and others may gain confidence in extending credit to your business when they see it can meet various credit terms and pay off debts in a reliable, consistent manner. You may consider business credit cards, lines of credit, and/or small loans to demonstrate your ability to navigate repayment.



Navigate the factors that affect your credit score

Your business’s creditworthiness is largely determined by its credit history. But other factors, including the time it’s been in business, the industry in which it operates, and matters revealed through public records, can also play a role in your business’s credit score.

Public records can show lenders the bankruptcies, liens, collections, and judgments against your business. Each of these items can remain on your credit report and reduce your credit score for a significant amount of time. Most remain on your record for seven years, but bankruptcies often impact scores for up to ten years. Because these marks are so long-lasting—and damaging—it’s important to take steps to avoid them.

You can take another step for older marks that pull your score downward. Consider working with a credit repair service that can remove items from your credit history. Credit RX America is one of these services, and it offers a 100% guarantee to remove score-impacting items. With this specific service, you can sign up for free and pay only for the results they help you attain. And, of course, there are many other reputable services you can use to take on this task.


What’s next?

Need more info on the steps to build your business’s credit? Check out these guides:


If you’re interested in the financing you can attain to build credit—or the options that’ll be available to you as you establish a solid credit history—these resources will help you understand your options:


Finally, to learn more about structuring your business as a separate legal entity, check out this article:


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