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How to Build Up Your Business Credit

Equipment Finance
Posted on 
October 1, 2023

Whether you’re just starting your business or already established, access to capital is important to your future growth. That’s where business credit comes into play. It’s essential for getting bigger and better business loans, grants, and many other types of financing.

Just starting out?

The U.S. Small Business Administration recommends making sure your personal credit history is in order. Loan eligibility for a new business is typically based on its owner’s personal credit score. So, if you’ve maintained a good personal credit rating, you’re off to a good start.

Is your business registered?

This is an important first step in establishing business credit. Register your business with the IRS to get an employer identification number (EIN). Having an EIN is your key to opening a business bank account, applying for business credit, and more.

You can also register your business for a Dun & Bradstreet DUNS number. Dun & Bradstreet is one of the three major business credit bureaus. Your DUNS number acts like a Social Security number and can be required for government contracts and certain grants or loans. According to the National Federation of Independent Businesses, it should be noted that a DUNS number can be created for a business without its permission or knowledge if a third-party supplier or financial institution requests information about the business. Checking if your business already has a DUNS number is a great place to start.

Already a registered business? Start building credit with these tips:

1. Open a business bank account. This account should be in your company’s legal name and used with your company’s federal EIN. Setting up this type of account separates your business from your personal finances and puts you on track to building business credit.

2. Get a business credit card. Opening, using, and paying off a business credit card on a regular basis is a quick way to establish credit. It’s also a great way to keep track of business expenses for tax time. Plus, you may be able to take advantage of special credit card offers that earn bonuses, dollars, and points.

3. Build relationships with vendors. As you create contracts and financing arrangements with vendors, you can build up your credit rating – especially if you work with vendors who report to the big credit agencies.

4. Pay vendors and suppliers early or at least on time. According to the U.S. Chamber of Commerce, you can earn a higher credit score by paying vendors early. For instance, businesses who pay vendors on time can earn a Dun & Bradstreet PAYDEX score of 80 out of a possible 100. To earn the highest score of 100, your business has to pay vendors early.

5. Be mindful of how much credit you use. In general, if you want to maintain a high credit score using your business credit card(s), you should use no more than 30% your total credit limit. This shows that you are both financially responsible and more than able to meet your minimum balance each month.

Monitor your credit and watch it build

It’s easy to check your business credit report a few times a year and it’s free! Simply check out your score with big credit agencies such as Experian, Equifax, Dun & Bradstreet, or other smaller credit reporting services. You could catch mistakes that hurt your credit and hopefully you’ll enjoy watching your score rise along with your success.

Apex Commercial Capital is a full-service lender focused on providing commercial mortgage and equipment financing to small businesses. We understand that the borrower is more than a credit score – we consider all the relevant financial information when reviewing a loan request, looking beyond the numbers to understand each business owner's objectives in determining how we can best work together to achieve them. Call (800) 262-APEX today to talk with our team of equipment finance specialists.


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