How to Build Business Credit for a Small Business

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Building business credit is a crucial stage for any new small business. This will help you keep your credit history distinct from your personal credit history, understand the business advantages of a good business credit history, and demonstrate detachment between owners and businesses.

Why should credit histories be separated?

The influence of negative possibilities can be minimized by separating your business credit history from your personal credit history if you have created a limited liability company (LCC) or company for your small business. For instance, if you have some financial mistakes that impact your credit rating and history, they should not affect your small business loan if you have set a clear separation and vice versa.

Why should the business be separated from the owners?

Unless you run your small business as a sole trader or general partnership, you must show that the company is separated from the owners. One of the essential advantages that corporations and LLCs supply to owners are the defence of their investments. Maintain this protection by constantly demonstrating a clear separation between owners and businesses.

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How to build business credit for a small business

There are some steps to establish your business credit:

1. Register your business

The business is lawfully identical to the owner with sole proprietorships and general partnerships. Thus, there can be no partition of business credit history from private. Registering a business or creating an LLC creates a company that is lawfully separate from the owner(s).

2. Get an EIN

An EIN (Federal Tax Identification Number) is a social safety number for businesses. This is needed to file federal tax returns and to open a bank account in the name of an LLC or corporation. To comply with IRS essentials, many gigantic businesses also demand EINs from their suppliers to pay them for services delivered.

3. Create a business bank account

Open a business account with the legal name of the company. After opening, be sure to pay for the business’s financial dealings from this account. For example, if you utilize a business credit card for many economic transactions, be certain to pay your credit card bill from your checking account.

4. Set a work phone number

Whether you use a landline, mobile phone, or VoIP, you must have a particular number for your company and its legal name. Please enter this number in the directory so that it can be found.

5. Open the business loan file.

It is better if the business credit file is opened with all three business reporting agents: Equifax, Experian, and TransUnion.

6. Get a business credit card(s)

Get at least one business credit card not personally associated with you or other owners. Choose a business credit card from a firm that apprises credit reporting agencies.

7. Set a line of credit with merchants or suppliers

Deal with numerous sellers/or suppliers (e.g. at least five) to make credit for your business to use when buying from them. Request them to register your payment history to the credit bureaus.

8. Bills should be paid on time.

It may not be worth talking about, but be sure to pay your bills on time. As with your credit, late costs will negatively influence your business credit.

Advantages of a good credit history

A small business can get a lot of advantages if it has good business credit. They include:

● Setting your company for better payment terms with new sellers and suppliers

● Decreasing the numeral of times you need to pay upfront for purchased products or services.

● Letting you get the best interest rates and loan terms from banks and lenders.

After establishing a good business loan, track and protect it just as you would with your private credit.


If you have your own small business, then having good business credit is very important. But it is also essential to maintain both a business card and a business credit rating so that you do not have problems in the future. There are several steps to creating business credit. Follow them, and you will succeed.

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