Business Credit 101

Alright, let’s talk business credit—because if you’re running (or thinking about starting) a business, this is something you NEED to know. And don’t worry, I’m not about to throw a bunch of confusing financial jargon at you. I’m breaking this down simple and straight so you can actually use it to grow your business.

So, What is Business Credit?

Think of business credit like your personal credit score…but for your business. It shows how trustworthy your business is when it comes to borrowing money and paying it back on time.

When you have good business credit lenders, suppliers, and banks feel more comfortable giving you money, better payment terms, and bigger opportunities. If your business credit is bad (or non-existent), it can be way harder to get funding or even simple things like setting up a payment plan with vendors.

Why Should You Care About Business Credit?

Even if your business is brand new or you’re still getting things off the ground, business credit is huge. Here’s why:

✅ Keeps your personal money separate – You don’t want your personal finances mixed up with your business finances. If something goes wrong, your personal credit won’t take the hit.

✅ Makes it easier to get loans & credit – Good business credit helps you get approved for business loans, credit cards, and even financing without needing your personal credit.

✅ Gives you more buying power – Many suppliers and vendors let businesses buy now, pay later—but only if your business credit is solid. That means you can stock up on inventory or equipment without paying upfront.

✅ Looks more professional – A business with strong credit is more trustworthy to banks, vendors, and even customers. It shows you’re serious and legit.

How Do You Build Business Credit from Scratch?

Alright, so you’re starting from zero. No business credit, no clue where to begin. Here’s what to do:

Step 1: Make Your Business “Official”

First things first you need to set up your business properly. That means:
✔️ Registering your business (LLC, S-corp, or whatever fits you best)
✔️ Getting an EIN (Employer Identification Number) – This is like a Social Security Number for your business. You can get one free from the IRS.
✔️ Opening a business bank account – DO NOT use your personal bank account for business expenses. Keeping them separate is key.

Step 2: Start Building Credit

Now that your business is official, you need to start showing that it can handle money responsibly. Here’s how:

✔️ Get accounts with vendors that report to business credit bureaus – Some suppliers let you buy things on credit and pay later. When you make on-time payments, they report it, and your business credit score starts growing.

✔️ Apply for a business credit card – Even if you don’t need it right now, using a business credit card for small purchases and paying it off builds credit FAST. Look for one that doesn’t require a personal guarantee.

✔️ ALWAYS pay on time (or early!) – This is THE biggest factor in business credit. Late payments = bad credit, and that’s the last thing you want.

✔️ Check your business credit reports – Just like personal credit, you have business credit scores with agencies like Dun & Bradstreet, Experian Business, and Equifax Business. Keep an eye on them!

What Can You Buy With Business Credit?

Once you have solid business credit, you can use it to:

💼 Buy inventory and supplies
📱 Upgrade to better equipment (laptops, tools, software, etc.)
🚀 Run marketing campaigns to grow your business
🏢 Rent office space or lease a business vehicle
💰 Get a loan or line of credit for expansion

Can You Use Business Credit Without Using Your Personal Credit?

YES…but only if you build it the right way. Many lenders and credit card companies ask for a personal guarantee(which means if your business doesn’t pay, YOU are personally responsible). But if you establish strong business credit, you can qualify for funding without ever needing to use your personal credit.

The Bottom Line? Business Credit = More Opportunities

If you want your business to grow, business credit is non-negotiable. It helps you get the money, resources, and flexibility you need WITHOUT putting your personal credit or savings at risk.

And the best part? You don’t need to be a finance expert to build it. Just follow these steps, stay on top of your payments, and watch your business unlock bigger and better opportunities.

💡 Thinking about starting or growing your business? Now’s the time to get your business credit set up the right way!