To build business credit, set your business up as its own entity, get an EIN from the IRS, open a business bank account, and open a few accounts in the business's name that report to business credit bureaus, such as vendor credit and a business credit card. Then pay every bill on time or early and check your reports. In 2026 it still takes time, so start before you need funding.
Last updated: October 2026
Why business credit matters for funding
When you ask for a line of credit, a business card or a loan, lenders look at your business credit. Without it, your personal credit carries most of the weight. The FDIC says it plainly in its Money Smart for Small Business guide (Module 6 Participant Guide):
"Building a business credit history is a process. Before you can build a business credit history, your personal credit often carries significant weight, particularly if your company is new."
The FDIC also points out what a strong business credit history can do for you: it helps keep your personal assets separate from the business, it can lead to higher credit limits, and it can earn you better financing terms.
Step 1: Make the business its own entity
Pick a business structure, such as an LLC or a corporation, and register it with your state. Keep it simple: choose a structure and register. The SBA's guide to managing your business finances is a good place to start thinking about how the business handles money.
Step 2: Get an EIN
An Employer Identification Number (EIN) is the tax ID for your business, and it is free from the IRS. The IRS application is free, so never pay a website that charges you for it.
Step 3: Open a business bank account and keep money separate
Open a business bank account and run all business income and bills through it. Keep personal spending out of it. Use the same business name, address and phone number everywhere: on your bank account, your bureau listings, your vendor accounts and your website.
Step 4: Get listed with the business credit bureaus
The main business credit bureaus are Dun & Bradstreet, Experian Business and Equifax Business. Dun & Bradstreet tracks businesses with a D-U-N-S number, and requesting one is free. Make sure each bureau has your business listed with the same name, address and phone number you use everywhere else.
Step 5: Start with vendor (trade) credit
SBA.gov's 5 Ways to Get Credit for Your Business lists several starting points:
- Payment terms from your suppliers
- A business credit card
- Service agreements, such as phone or internet accounts in the business name
- A secured business credit card
- Retail store accounts in the business name
Many suppliers offer "net terms," which means you get the goods now and pay within an agreed number of days. Here is the key point: vendor credit only builds business credit if the vendor reports your payments to a business bureau. Ask before you open the account.
Step 6: Add a business credit card, and use it lightly
A business credit card that reports to business bureaus is one of the quickest ways to add history. Keep your balance low compared to your limit and pay in full when you can. Most cards still ask for a personal guarantee, especially for a new business. For how a card compares to other short-term money, see business credit card vs merchant cash advance.
Step 7: Pay on time or early, every time
Business credit reports can show how many days past the due date you paid, not just whether you paid. Paying early can help, and paying on time every time matters most. Set reminders or autopay so no bill slips.
Step 8: Check your business credit reports and fix errors
Check your report with each bureau. If something is wrong, such as an account that is not yours or a late payment you paid on time, dispute it with that bureau in writing. Also watch for liens and judgments, since these can show up on business credit reports and weigh on your file.
What hurts business credit
- Late payments
- Maxed-out cards
- Mixing personal and business money
- A pile of credit applications at once
- Taking stacked merchant cash advances you cannot keep up with
If you are weighing an advance, read is a merchant cash advance a good idea first.
Watch out for "business credit builder" pitches
If a caller promises fast business credit or a guaranteed tradeline for an upfront fee, slow down. You can request bureau listings and open vendor accounts yourself, and real ones do not need a middleman. These pitches often come with a stream of broker calls. See how to stop MCA broker calls and our guide to grant fee scams.
For example, Harbor Lane Bakery (a made-up business) got a call offering "instant business credit" for a fee. The owner skipped it, asked her flour supplier to report her net terms, and built her file herself.
Funding you can use while your credit builds
- Business loan with no credit history
- Bad credit business loans
- Startup business funding
- How to get an SBA microloan (see also SBA microloans)
- CDFI business loans
- How to get a business line of credit
For free help, try the FDIC's Money Smart for Small Business.
Every other way to fund your business
Business credit is the path to cheaper money, like a line of credit, an SBA loan or a card, so you may not need a merchant cash advance. See every way to fund your business.
Getting ready to apply? Read what documents you need for a business loan. Turned down? See business loan denied: what to do next.
Sources
Checked on FDIC.gov, SBA.gov and IRS.gov in October 2026.