How to build business credit and get better loan terms

Published Thursday 16 April 2026

Table of contents

• What is business credit?
• How business credit differs from personal credit
• Benefits of having a good business credit score
• How to build business credit for your LLC or corporation
• How to build business credit as a sole proprietor
• FAQs on building business credit

Key takeaways

• Separate your business finances from your personal ones by registering your business, getting an Employer Identification Number (EIN), and opening a dedicated business bank account and credit card to build a credit profile that stands on its own.
• Pay all business bills on time or early, since payment history is the single most important factor in building your business credit score, and late payments can stay on your report for years.
• Work with suppliers and use credit cards that report your payment activity to all three major business credit bureaus (Dun & Bradstreet, Experian, and Equifax), as not all vendors report by default.
• Check your business credit reports regularly across all three bureaus to catch errors early, since mistakes can limit your financing options if left uncorrected.

What is business credit?

Business credit is a measure of your business's creditworthiness, separate from your personal credit history. Credit bureaus create a file for your business that includes a credit score and a record of your bill and loan payments. The amount of history included varies by bureau and data source.

Lenders, suppliers, and investors use this information to decide whether to extend financing or credit terms to your business. A high credit score signals that you pay on time and manage debt responsibly.

Three major credit bureaus track business credit in the US:

• Dun & Bradstreet: uses the PAYDEX score, ranging from 0 to 100.
• Experian: uses the Intelliscore Plus, ranging from 1 to 100.
• Equifax: uses the Business Credit Risk Score, ranging from 101 to 992.

Each bureau calculates your score based on factors including how you repay business loans, lines of credit, and credit cards, as well as public records, outstanding balances, and other risk indicators. Some suppliers and utility companies also report your payments. Because each bureau weighs factors differently, your business may have a slightly different score with each one.

How business credit differs from personal credit

Business credit and personal credit are separate scores that measure different financial behaviors. Understanding the differences helps you build both effectively.

Here's how they compare:

• Who it's tied to: personal credit is linked to your Social Security number; business credit is linked to your Employer Identification Number (EIN).
• Score ranges: personal credit scores range from 300 to 850; business credit scores vary by bureau (Dun & Bradstreet uses 0 to 100, for example).
• What affects it: personal credit tracks mortgages, car loans, and credit cards; business credit tracks vendor payments, business loans, and trade lines.
• Who can see it: personal credit reports require your permission to access; business credit reports are often publicly available.
• Liability: poor personal credit affects only you; poor business credit can limit your company's financing options and supplier terms.

Building strong business credit protects your personal finances and gives your company its own financial identity.

Benefits of having a good business credit score

A strong business credit score helps you access better financing terms, lower interest rates, and more options for growing your business. Here are the key benefits.

Cheaper financing

Lenders offer better interest rates and credit terms to businesses with strong credit scores. A high score signals that you manage debt responsibly, which reduces the lender's risk.

Businesses with lower scores often face higher interest rates, larger down payments, or stricter repayment terms. Building your credit now can save you thousands over the life of a loan.

More access to different finance options

Strong business credit opens doors to more funding options, such as participating in federal initiatives where the Treasury Department disbursed $2.6 billion in State Small Business Credit Initiative (SSBCI) capital program funds as of late 2023. Beyond traditional bank loans, you may qualify for:

• business lines of credit
• equipment financing
• SBA loans
• invoice factoring
• alternative online lenders

Lenders are more likely to work with businesses that demonstrate financial responsibility.

Better terms with suppliers

Suppliers often require deposits or upfront payments from businesses without established credit. A strong credit score helps you avoid these requirements and negotiate better terms, such as net-30 or net-60 payment windows. This keeps more cash in your business when you need it most.

A stronger business

As you work to establish and build your business credit score, you improve your financial habits across the board. This creates a more stable business.

You can also use your knowledge of credit to improve your relationships with other businesses. In particular, before extending credit to clients, check their scores to help avoid bad debts.

How to build business credit for your LLC or corporation

Building business credit takes a few key steps. If your business is structured as a limited liability company (LLC) or corporation, follow this process to establish and grow your credit profile.

Register your business and get an EIN

Before you can build business credit, your company needs a formal identity. Complete these steps first:

1. Choose your business structure: register as an LLC, corporation, or other entity with your state (for example, to become an S corporation, you must submit Form 2553 signed by all shareholders).
2. File required documents: submit articles of incorporation or organization to your state's Secretary of State office.
3. Get an EIN: apply for an Employer Identification Number from the IRS at no cost.

Your EIN acts like a Social Security number for your business. You'll need it to open business bank accounts, apply for credit cards, and file taxes. Apply online at IRS.gov and receive your number immediately.

Get a DUNS number

A DUNS number is a unique nine-digit identifier assigned by Dun & Bradstreet to your business. Many lenders and large companies use it to look up your business credit file.

Here's how to get one:

1. Visit the Dun & Bradstreet website.
2. Search for your business to see if a number already exists.
3. If not, request a free DUNS number (processing takes up to 30 days).
4. Expedited options are available for a fee if you need it faster.

Once you have a DUNS number, Dun & Bradstreet begins tracking your business credit activity. Pay your bills on time to build a strong PAYDEX score. Note that federal government contracting now uses a Unique Entity ID (UEI) through SAM.gov rather than a DUNS number, but a DUNS number remains useful for private-sector credit building purposes.

Check your existing business credit file

Start by checking whether you already have a business credit file:

1. Search for your business on Dun & Bradstreet, Experian, and Equifax.
2. Download any existing reports and review them for accuracy.
3. Dispute errors directly with the bureau that reported them.

Credit bureaus may have created a file for your business based on public records or supplier reports. Checking your reports regularly helps you catch mistakes before they affect your financing options.

Open a business bank account and get a business credit card

To build credit, you need to use credit. Here's how to start:

1. Open a business bank account: link it to your EIN, not your Social Security number, to keep business finances separate.
2. Apply for a business credit card: look for cards that report to all three major business credit bureaus.
3. Use your card regularly: make purchases and pay the balance on time or early each month.
4. Keep utilization low: aim to use less than 30% of your available credit limit, as high utilization can lower your score with some lenders and bureaus.

Pay your bills early or on time

Paying bills on time is the single most important factor in building business credit. Late payments can stay on your credit report for years and significantly lower your score.

To stay on track:

1. set up payment reminders or automatic payments.
2. track due dates in your accounting software.
3. contact suppliers before a payment is late to negotiate terms.

Pay your bills from your business account

Pay all business expenses from your business bank account to ensure your company gets credit for the payments. Set up accounts in your business's legal name, including:

• utilities and phone service
• office supplies and equipment vendors
• software subscriptions
• insurance policies

Payments made from personal accounts won't appear on your business credit report.

Keep your business accounts open

Credit bureaus factor in how long your accounts have been open. A longer credit history generally results in a higher score.

Keep older accounts open, even if you're not using them regularly. Closing an account shortens your credit history and can lower your score. The exception: if annual fees outweigh the benefit, closing may make sense.

Work with suppliers who report to the credit agencies

Not all suppliers report payment data to business credit bureaus. Whether a supplier reports depends on their own policies and bureau relationships. When setting up a new vendor account, ask whether they report your payment history to Dun & Bradstreet, Experian, or Equifax.

Some suppliers are more likely to report your payment history to credit bureaus than others. Suppliers more likely to report include:

• office supply companies
• shipping and logistics providers
• equipment leasing companies
• wholesale distributors

You can also use trade credit reporting services that report your payments on your behalf.

Learn more about LLCs and S-corporations

How to build business credit as a sole proprietor

Yes, sole proprietors can build business credit, but the process works differently than for LLCs or corporations. Because your business isn't legally separate from you, lenders often require personal credit information alongside business details.

Your personal credit score, based on mortgages, car loans, and credit cards, will likely factor into business financing decisions. Building strong personal credit helps you qualify for better business loan terms.

Follow these steps to build business credit as a sole proprietor:

1. Get an EIN: apply for an Employer Identification Number from the IRS, even if you don't have employees.
2. Register your business: file a DBA (doing business as) with your state if you operate under a name other than your own.
3. Open business accounts: set up a business bank account and credit card linked to your EIN.
4. Get a DUNS number: register with Dun & Bradstreet to create a business credit file.
5. Pay on time: use your business credit card regularly and pay the balance in full each month.

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FAQs on building business credit

Here are answers to common questions about building business credit for your business.

How long does it take to build business credit?

Building business credit typically takes six months to a year of consistent payment activity. Your business needs to establish a track record with credit bureaus before you'll see a score. The more accounts that report your payments, the faster your credit file develops.

Can I build business credit with bad personal credit?

Yes, you can build business credit even with bad personal credit, especially if you structure your business as an LLC or corporation. However, lenders may still check your personal credit when evaluating loan applications, particularly for new businesses. Focus on paying business bills on time to establish a strong business credit profile separate from your personal history.

Do all business credit cards report to credit bureaus?

Not all business credit cards report your payment activity to business credit bureaus. Before applying for a card, ask the issuer whether they report to Dun & Bradstreet, Experian, and Equifax. Choose cards that report to all three bureaus to maximize your credit-building efforts.

What's a good business credit score?

A good business credit score depends on the bureau. For Dun & Bradstreet's PAYDEX score, 80 or above is considered good. For Experian's Intelliscore Plus, aim for 76 to 100. For Equifax's Business Credit Risk Score, lower numbers are better, with scores below 500 indicating lower risk. Each bureau uses different scales, so check your score with all three.