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How to Build Business Credit

If you're a small business owner, it's likely that your business needs a lot of tools and supplies to get off the ground. You might need equipment for your office, vehicles for employees or even computers. If you don't have enough money to purchase all of these things yourself, then buying them on credit could save you from having to wait until you make money before ordering that new computer. But if you've never had much experience with credit cards before—or have bad credit—using one for your business can be risky. Fortunately, there are ways to build up your business' credit so that you are able to meet your business needs without too much of a hassle. Read on to find out how!

Create a Business Bank Account

If you've never had a business bank account before, then this is definitely the first step to building your business credit. Not only can you access your money more quickly using a business checking account than if you have to wait for a personal check to clear, but it will also help establish your company's credibility with other banks and creditors in case they ever need to verify that your company exists.

You can open a business bank account at any financial institution, but it's probably best if you go with one that already has a good reputation for providing small business loans. Many banks offer special services for businesses including credit cards, debit cards and online banking accounts.

Get a Tax ID

When you start a business, you'll need to apply for and obtain a Tax ID. This is an important step in building your business credit because it's the same as getting a social security number or driver's license for yourself—it's proof of your legitimacy as an organization. You can get one by following these steps:

  • Go to the IRS website and click on "File -> Businesses & Self-Employed” under their main navigation bar

  • Scroll until you see “Apply for an Employer Identification Number” or “EIN” which will take you directly to the application page

  • Once completed successfully, keep track of all correspondence between yourself and the IRS - this includes emails, phone calls etc., otherwise known as "proof", which will come in handy later when trying to build credit history. It might be worth establishing an email list specifically designed just for communicating with them since most businesses don't even receive notifications once completed successfully - just remember that everything must go through official channels.

Find Suppliers who Report to Business Credit Bureaus

Another way to build business credit is by finding suppliers who report to business credit bureaus. If you are a startup and want to get your first few customers, it can be tough if you don't have any type of history or track record. However, there are many businesses out there that want to work with startups but require some kind of guarantee in other to do. They might request that you give them a "letter of credit" or some type of guarantee from another company that has been around longer than you have been in business.

You can solve this by finding and working with suppliers who report back to the bureaus so that when they do give you the guarantee —the bureaus will see this action taken by your supplier, which in turn increases their confidence level in giving credit to you in the future.

Apply for Business Credit Cards

While it's true that business credit cards are not the same as personal credit cards, they can still help you build up your credit—as long as you use them responsibly. If you have a good business and have been in operation for at least one year, then most banks will allow you to apply for a business credit card. It's important to remember that these cards can be used only for your business expenses, and if you use them for personal spending, then this will hurt your ability to get approved for future loans or lines of credit.

Apply for Commercial Insurance

Insurance is one of the top ways to build your business credit. You can apply for commercial insurance on everything from property damage to liability coverage. This is especially important if you have employees, as a business owner's policy will not cover them and their families in the event of an accident that causes injury. This can help you get a business credit card and also build your credit score.


The more you can do to build your business credit, the better off you will be. You need a strong credit score to get approved for a business loan or line of credit, and once you're approved for one of these loans, it's important that you use it wisely so that your lender will continue to work with you in the future.

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1 Comment

Yvonne Tate
Dec 27, 2022

I have been both ignorant and hesistant when it comes to this; could use some sound guidance.

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