Understanding Business Credit for Your Startup


It is often the case that small businesses don’t apply for credit in the early stages. Personal and business credit scores are the primary cause of denial when they finally do apply.

And it is not because they have a poor business credit rating, it is because they don’t have one at all, it is essential that the minute you open your door as you look at ways that you can build a strong credit rating for your business. You can look for a list of vendors who deal with small vendor lines of credit.

Here are some tips to make sure that you have a strong business credit rating from the start.

What is Business Credit

A Business credit score is much like a personal credit score. This score will enable investors financial organisations and other companies to decide whether they should do business with you or if you are a good candidate to lend money to.


There is a range of agencies that will calculate your business credit score; each agency has different calculation methods. You will find that most are ranked from 0 to 100. Obviously, the higher your number, the lower your calculated risk. It is recommended that you aim for a score of 80 or higher.

The factors that will impact your business credit are liens, bankruptcy, credit, outstanding balances, payment habits and your demographic information and business size and years on file.

Business credit is incredibly important because strong business credit can help you grow your business over the years. Banks, companies, and investors will rely on your business creditworthiness when they are setting loan terms looking at increasing lines of credit, or even your insurance premiums.

It is important to know that your business credit will be linked to your business entity and a separate tax ID number. 

Business Bank Account

You have to separate your personal credit from your business credit. When you open a business bank account, this is exactly what you will do. 

Use this account and this account only to take care of all of your business expenses. If and when you apply for financing, most lenders will want to see your business bank statements. 

These business bank account statements will help them make a decision about your lending future.

Experian and Equifax

Experian and Equifax are two of the major business credit bureaus. Credit agencies will use Equi fax and experience data when they are making their decisions. They both pull information automatically from public records plus the information sent in by your business creditors and lenders. 

This is how your personal credit profile that populated too.

Line of Credit

You will likely already have some relationships established with benders or suppliers. Consider the companies that you do business with like Office Depot UPS FedEx staples and so on. You can apply to them to extend you a small amount of credit most often they will as they want to keep you as a customer. 

You should ask them to ensure that they send your payment history onto the business credit bureaus. This is reported voluntarily. You should look to establish at least four of these types of accounts and help to fill out your business credit profile. 

However, don’t be tempted to take large loans in order to start building your credit profile-these can be very costly in the long run.

Business credit card 

If you have been looking for a personal credit card to pay for business expenses you need to stop this now. 

You should only have business credit cards that are not linked to you personally, and only links to your business. Verify that they report back to the business bureau when applying so you can make you sure this is going towards your business credit score.

Pay Up

You need to ensure that you pay your bills on time; this is one of the only ways is to ensure that you will have a high credit score. In fact, if you have the ability to pay early and in full – do it. 


If you haven’t done so already, you really should establish your business as a separate legal entity within your state. This will mean either setting up an LLC, S-Corp, or incorporating. 

It is wise to discuss your situation with a tax advisor before registering for any of these legal entities. 

You will also want to apply for an EIN number too, which is an employer identification number, you will do this to the IRS website.

DUNS number

After your business is established, you should check to see that you have been listed with Dun & Bradstreet. Dun and Bradstreet, I want the main credit bureaus, and it’s paid X score is used in most trade credit applications. If your business is not registered with the D&B, you can register for a DUNS number for free.

Just like personal credit pay your bills on time, don’t overstretch yourself and make sure that you always keep your business credit in good standing.

With just a few short steps you will have a business credit for your startup, that will give you the ability to grow in the future.