Business Credit: Build a Separate Credit Profile for Your Company
Business credit is completely separate from your personal credit, allowing you to access funding, protect personal assets, and build company value without personal guarantees. This comprehensive guide shows you how to establish and build strong business credit from scratch.
Personal vs. Business Credit: Key Differences
Foundation: Setting Up Your Business Correctly
Essential Business Foundation (Must Complete in Order)
Choose Business Structure
Get Your EIN (Employer Identification Number)
- Apply free at IRS.gov
- Instant online approval
- This is your business "SSN"
- Required for business credit
- Keep number secure
Open Business Bank Account
- Use business name and EIN
- Keep finances completely separate
- Choose bank that reports to business bureaus
- Maintain positive balance
- Use regularly for business expenses
Get Business License
- City/county business license
- State license if required
- Industry-specific permits
- Display at business location
- Renew annually
Establish Business Address
- No residential addresses
- Virtual office OK ($50-150/month)
- UPS Store box acceptable
- Must receive mail there
- Update all registrations
Get Business Phone Number
- Dedicated business line
- Listed in 411 directory
- Google Voice acceptable
- Match all applications
- Professional voicemail
Getting Your DUNS Number (Critical Step)
What is a DUNS Number?
Your Data Universal Numbering System (DUNS) number is like a Social Security number for your business. It's required by most lenders and vendors for business credit.
How to Get Your DUNS Number:
Option 1: Free (30 days)
- Apply at dnb.com
- Fill out business information
- Wait 30 days for processing
- Receive via email
Option 2: Expedited ($229)
- Get DUNS in 1-2 business days
- Includes D&B credit file setup
- Phone support included
- Worth it if time-sensitive
DUNS Application Tips:
- Use exact business legal name
- Match address to business license
- Be generous with revenue projections
- List maximum employees planned
- Choose accurate industry codes
Building Initial Trade Lines with Vendors
The Vendor Credit Strategy
Start with vendors that report to business credit bureaus and don't require personal guarantees. Build from easy approvals to major suppliers.
Tier 1: Starter Vendors (No Credit Check)
Shipping/office supplies
Reports to: D&B
Terms: Net 30
Min order: $50
Office supplies
Reports to: D&B, Experian
Terms: Net 30
Min order: $100
Industrial supplies
Reports to: D&B
Terms: Net 30
Min order: $50
Telecom services
Reports to: D&B, Experian
Terms: Net 30
Min order: $50
Tier 2: Intermediate Vendors (Some History Required)
Everything
Reports to: D&B
Terms: Net 30
Requirements: 3+ trade lines
Construction/maintenance
Reports to: D&B
Terms: Net 30-60
Requirements: 5+ trade lines
Office supplies
Reports to: D&B, Equifax
Terms: Net 30
Requirements: 3+ trade lines
Tier 3: Advanced Credit (Strong Profile Required)
- Fleet fuel cards (BP, Shell, Exxon)
- FedEx/UPS business accounts
- Equipment financing
- Business credit cards
- Lines of credit
Understanding Your Paydex Score
What is Paydex?
Paydex is Dun & Bradstreet's business credit score, ranging from 0-100. Unlike personal credit, HIGHER is better, and 80+ is considered excellent.
Paydex Score Scale:
How to Get 80+ Paydex:
- Pay early: 100 score for paying before due date
- Need 3+ trade lines: Minimum for score generation
- $50+ purchases: Small amounts often not reported
- Consistent history: 3-6 months of payments
- Multiple vendors: Diversify your trade lines
Business Credit Cards Strategy
Progressive Card Strategy
Stage 1: Secured Business Cards
Stage 2: Starter Business Cards (With PG)
PG = Personal Guarantee required initially
Stage 3: No Personal Guarantee Cards
Requirements: 6+ months history, 80+ Paydex, $100k+ revenue
Business Credit Building Timeline
Month 1-2: Foundation
- Form LLC/Corp
- Get EIN
- Open business bank account
- Get business license
- Apply for DUNS number
- Set up business address/phone
Month 3-4: Initial Credit
- Apply to 3-5 starter vendors
- Make small purchases ($50-200)
- Pay early or on time
- Apply for secured business card
- Monitor D&B file creation
Month 5-6: Expansion
- Add 2-3 more vendor accounts
- Increase purchase amounts
- Check Paydex score
- Apply for business credit card
- Consider equipment financing
Month 7-12: Scale
- 10+ active trade lines
- 80+ Paydex score
- Multiple business cards
- Qualify for lines of credit
- No PG options available
Monitoring Your Business Credit
Business Loans and Lines of Credit
Loan Options by Business Age
0-6 Months
- Revenue-based financing
- Merchant cash advances (expensive)
- Invoice factoring
- Personal loans for business
6-12 Months
- SBA microloans ($50k max)
- Short-term loans
- Business lines of credit ($25-100k)
- Equipment financing
1-2 Years
- SBA 7(a) loans
- Term loans to $500k
- Larger credit lines
- Asset-based lending
2+ Years
- Bank term loans
- Commercial real estate
- Large equipment loans
- $1M+ credit facilities
Common Business Credit Mistakes
❌ Mixing Personal and Business
Using personal cards for business or paying business expenses from personal accounts destroys separation.
❌ Inconsistent Information
Different addresses, phone numbers, or business names across applications causes denials.
❌ Applying Too Early
Need minimum 3 trade lines and 3 months history before most approvals.
❌ Small/Irregular Purchases
Vendors often don't report purchases under $50 or irregular activity.
❌ Not Monitoring Reports
Errors are common. Not catching them early hurts your scores.
❌ Closing Vendor Accounts
Keep accounts open even if unused - age matters for business credit too.
Advanced Business Credit Strategies
Credit Stacking
Apply for multiple cards/lines on same day to maximize approvals before inquiries show.
- Research qualification requirements first
- Apply strongest to weakest
- Can get $100-500k in one day
- Use different banks
Vendor Credit Chains
Use initial vendors to qualify for better vendors in sequence.
- Uline → Grainger → Amazon Business
- Each approval makes next easier
- Build to premium vendors
Business Credit Partners
Add business partners with strong credit as guarantors initially, remove later.
- Helps initial approvals
- Remove after 6-12 months
- Business keeps credit line
Shelf Corporations
Buy aged corporation for instant business age (controversial but legal).
- 2+ year old corps available
- $800-5000 cost
- Still need to build payment history
- Some lenders see through this
ROI of Building Business Credit
Investment vs. Return
Typical Investment (Year 1):
- LLC formation: $100-500
- Virtual address: $600-1200
- DUNS expedited: $229
- Credit monitoring: $1200
- Initial purchases: $1000-2000
- Total: $3,000-5,000
Typical Returns:
- Business credit cards: $50-200k limits
- No personal guarantee required
- Lower interest rates (save 3-7%)
- Equipment financing access
- Vendor terms (improve cash flow)
- Business value increase
- Access to $100k-1M+ in credit
Start Building Your Business Credit Today
Every day you wait is lost opportunity. Begin separating your business and personal credit now.