10 Essential Steps to Build Business Credit from Scratch

Building business credit from scratch can seem a little daunting, but it’s one of the best moves you can make for your business. It’s not just about securing financing; it’s about managing cash flow smoothly and boosting your credibility with clients, suppliers, and even potential investors. Here’s a quick, straightforward guide to setting up and growing your business credit step-by-step:

1. Set Up Your Legal Business Structure

Get started by choosing a legal structure—an LLC or corporation is usually the way to go. This not only makes your business look professional but also sets a clear line between your personal and business finances, which is essential for building a separate credit profile. Learn more about business structures.

2. Register Your Business

Make it official! Register your business with the appropriate state and local authorities. It’s a necessary step for establishing your business identity and, down the line, for building credit with lenders and vendors.

3. Obtain an EIN

An Employer Identification Number (EIN) from the IRS is a must-have. Think of it as your business’s Social Security number. It’s essential for tax purposes and helps keep your business identity distinct from your personal one.

4. Register for a DUNS Number

This one’s important: apply for a DUNS number through Dun & Bradstreet. Financial institutions and suppliers use this nine-digit identifier to check your business creditworthiness. It’s free, and it’s a powerful tool for establishing your business in the credit system.

5. Open a Dedicated Business Bank Account

A separate business bank account is a must for clean, clear financial records. It’s also a good indicator of financial responsibility, which banks and creditors appreciate when considering you for future credit.

6. Establish Trade Lines

Set up trade accounts with suppliers or vendors who offer net payment terms (like net 30 or net 60). This is one of the best ways to start building a credit history for your business—just be sure to pay these accounts on time to build a strong record.

7. Apply for a Business Credit Card

A business credit card used wisely can be a huge asset. If your personal credit isn’t stellar, try starting with a secured business credit card. As you build your credit, more options will open up!

8. Explore Business Credit Builder Loans

Look into small credit-builder loans aimed at new businesses. Just make sure you’re working with lenders who report to business credit bureaus so that your payments contribute to your credit score.

9. Ensure Prompt or Early Payments

Paying bills on time, or even early, can do wonders for your credit score. On-time payments signal responsibility and reliability, both of which are highly valued by lenders.

10. Monitor Your Credit Regularly

Get in the habit of checking your business credit reports to see your progress. Correcting any inaccuracies as soon as possible will keep your credit profile strong and up-to-date.

Building business credit is all about consistency and responsible financial practices. Stay on top of it, and over time, you’ll see the rewards: easier financing, better rates, and a reputation for reliability in the business world!

Building your business credit is an investment that pays off in more ways than one—from gaining access to essential financing to building a trustworthy reputation. These steps are just the beginning, and with the right strategies, you can reach your goals even faster.

If you're ready to take your credit journey to the next level, check out our comprehensive guide and workbook,

"How to Get $100,000 in Business Credit in 90 Days." This guide is packed with proven strategies, actionable steps, and expert tips that can help you secure the funding you need—no matter the size or stage of your business.