How to Build & Improve Your Business Credit Score

Building strong business credit is one of the best moves you can make for your company’s long-term financial health. Good credit opens doors to better financing options, higher credit limits, and lower interest rates. This guide walks you through everything you need to know about establishing and improving your business credit score.

What Is Business Credit & Why It Matters

Just like personal credit, business credit is a financial reputation that lenders, suppliers, and vendors use to evaluate how reliably you manage debt. Whether you're seeking lines of credit or long-term loans, a strong business credit score makes it easier to: 

• Qualify for loans and credit lines with better terms.
• Negotiate favorable trade credit agreements with suppliers.
• Reduce personal liability by limiting the need for personal guarantees.
• Build long-term financial stability for your business.

How Business Credit Scores Work

Business credit scores work differently than personal credit scores. Instead of a single score, your business may have multiple ratings from different agencies. Here’s how they break down:

• Dun & Bradstreet PAYDEX Score (0-100): Based on payment history, with 80+ being strong.
• Experian Intelliscore Plus (1-100): Evaluates multiple financial factors, with 76+ being low risk.
• Equifax Business Credit Score (101-992): Assesses payment trends and public records, with 700+ being favorable.

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Inject Step 1 Start

Do you need a loan for your small business?:*

No   Yes  

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Inject Step 2 Start

How long have you been in business?

Month:*

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Year:*

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Inject Step 3 Start

What is your annual revenue?:*

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Steps to Establish Business Credit (Even If You’re a Startup)

If you’re just starting out, you may not have a business credit score yet. The good news? You can build one from scratch with these steps:

• Form a Legal Business Entity: Register as an LLC or corporation to separate business and personal credit.
• Get an EIN (Employer Identification Number): This acts as a business Social Security number.
• Open a Business Bank Account: Keep business finances separate from personal funds.
• Register with Business Credit Bureaus: Dun & Bradstreet, Experian, and Equifax track business credit history.
• Apply for a Business Credit Card: Choose a card that reports to business credit bureaus.
• Work with Vendors That Report Payments: Building trade credit with suppliers helps establish your score.

How to Improve Your Business Credit Score Fast

If you already have business credit but need a higher score, these strategies can help. Consider options like invoice factoring to maintain steady cash flow while building credit. 

• Pay Bills Early or On Time: Late payments damage your credit, while early payments boost your PAYDEX score.
• Keep Credit Utilization Low: Aim to use less than 30% of your available credit.
• Monitor Your Credit Reports: Check for errors and dispute any inaccuracies.
• Limit Hard Inquiries: Too many credit applications in a short time can lower your score.
• Build a Credit Mix: Having different types of credit (loans, lines of credit, trade accounts) shows lenders you can manage debt responsibly.

Common Business Credit Mistakes to Avoid

Building business credit takes time, but missteps can set you back. Avoid these common pitfalls:

• Mixing Personal & Business Finances: This can make tracking expenses difficult and hurt your business credit.
• Missing Payments: Even one late payment can lower your score.
• Applying for Too Much Credit: Frequent applications can be a red flag to lenders.
• Ignoring Your Credit Reports: Errors happen, and if you don’t check, you won’t catch them.
• Not Using Credit at All: A lack of credit history can be just as bad as a low score.

Best Practices for Long-Term Credit Management

Once you’ve built a strong credit score, maintaining it is key. Here’s how:

• Make Payments on Time: Set up reminders or autopay to avoid late fees.
• Use Credit Responsibly: Borrow only what you can repay.
• Increase Credit Limits When Possible: A higher credit limit with low utilization strengthens your profile.
• Reassess Your Credit Needs Regularly: Your business will evolve, and so will your credit requirements.

How Good Credit Helps You Secure Better Business Funding

Strong business credit gives you more leverage when seeking financing. Lenders and investors prefer businesses with established credit histories. Here’s how a good credit score benefits you:

• Higher Loan Amounts: Access to larger funding for growth.
• Lower Interest Rates: Save money on financing costs.
• More Financing Options: Qualify for traditional loans, lines of credit, and SBA loans.
• Stronger Vendor Relationships: Secure better terms and discounts with suppliers.

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Final Thoughts

Building business credit isn’t just about getting loans—it’s about creating financial stability and unlocking growth opportunities. Whether you’re starting from scratch or improving an existing score, following these steps will put your business in a stronger position.

Need funding to grow your business? Apply today or call 877-400-0297 to discuss your financing options.

About the Author

Josh Clark

As a Senior Funding Specialist at BusinessCapital.com, Josh helps businesses secure the capital they need to grow and thrive. With his results-driven approach and deep understanding of financial solutions, Josh guides clients through our quick, simple funding process. His focus on building strong relationships and delivering fast results has helped countless business owners access the working capital they need.