How To Build Business Credit Fast: Open up Financial Opportunities

CREDIT CARDS - BUSINESS CREDIT CARDS
You can start building your business credit history in as little as a few months, but it might take a year or more to establish a good business credit score.
Updated April 12, 2024
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Building your business credit as fast as possible comes down to taking a few simple steps to help ensure you’re establishing a good business credit history.

This includes choosing the right structure for your business, using business bank accounts and credit cards, and getting a free Dun & Bradstreet D-U-N-S Number to ensure proper reporting of your business credit activity.

Let’s explore how to build business credit fast so you can work toward opening up more financial opportunities for your business.

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In this guide to building business credit

Key takeaways

  • It could take a few months for applicable business activity to appear on business credit reports. But it might take years of responsible activity to establish a good business credit score.
  • Business credit scores function similarly to personal credit scores, but they’re attached to your business credit activity that’s reported to business credit bureaus. The major business credit bureaus are Dun & Bradstreet, Experian, and Equifax.
  • Business credit cards are an important tool for helping you establish a business credit history.

5 steps to building business credit fast

Follow these steps if you want to speed up the process of building your business credit profile.

1. Establish a business entity

Establishing a business typically requires selecting a type of business structure, which has tax, operations, and personal liability implications. Common business structures include:

  • Sole proprietorship
  • Limited liability company (LLC)
  • Partnership
  • C corporation
  • S corporation

Find out more about the types of businesses you can choose from.

Note that sole proprietors don’t create a separate business entity, which is often important for establishing a business credit score, as it helps separate your business from your personal life.

It’s still possible to establish a business credit score as a sole proprietorship, but it might make more sense to create a separate legal entity.

2. Open a business bank account

A business bank account can help you separate your business and personal finances. This is important for establishing your business as a unique identity and making it easier to organize your finances for IRS tax purposes.

A business checking account can pave the way for building a relationship with a bank, which can help when you start working on building your business credit history. Having an existing relationship could help you get approved for credit from a bank, which can directly affect how quickly you can start establishing a business credit score.

Learn how to open a business bank account.

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3. Obtain a business credit card

Using a personal credit card responsibly, for example by making purchases and on-time payments, can help you establish a credit history and possibly increase your personal credit score.

In a similar way, many business credit cards report your card activity to business credit bureaus, which can help you build your business credit history.

If you don’t want business card activity affecting your personal credit reports, you should avoid business cards that report to personal credit bureaus.

As an added benefit, many business credit cards provide valuable rewards for making eligible purchases. Depending on the card, you might be able to redeem your rewards for cash back, travel, gift cards, and more.

Note that you don’t need an established business credit history or score to apply for most business credit cards. You can often supply your Social Security number on a business card application and the card issuer will check your personal credit history, among various factors, to determine your eligibility. This could be helpful for new business owners and startups.

Here are some of our recommendations for business credit cards:

Card name Welcome offer Rewards rate Annual fee
Ink Business Cash® Credit Card Earn $350 when you spend $3,000 on purchases in the first three months and an additional $400 when you spend $6,000 on purchases in the first six months after account opening 5% cash back on the first $25,000 spent in combined purchases at office supply stores and on internet, cable and phone services each account anniversary year; 2% cash back on the first $25,000 spent in combined purchases at gas stations and restaurants each account anniversary year; and 1% cash back on all other purchases $0
The Business Platinum Card® from American Express Earn 120,000 Membership Rewards points after spending $15,000 on eligible purchases in the first 3 months 5X points on flights and prepaid hotels on Amextravel.com; 1.5X points on eligible purchases at U.S. suppliers of construction materials and hardware, U.S. retailers of electronic goods, U.S. providers of shipping, software and cloud systems, and eligible purchases of $5,000 or more (up to $2 million per year, then 1X); and 1X points per $1 spent on all other eligible purchases $695 (Terms apply)
Capital One Spark Miles for Business Earn 50,000 miles after spending $4,500 in the first 3 months 5X miles on rental cars and hotels booked through Capital One Travel, and 2X miles on every purchase, every day $95 (waived first year)
U.S. Bank Business Leverage® Visa Signature® Card Earn $750 in rewards when you spend $7,500 in eligible purchases on the account owner's card within the first 120 days of opening your account 5% cash back on prepaid hotels and car rentals booked directly in the Rewards Center; 2% cash back in top two categories where you spend the most each month automatically; 1% cash back on all other eligible purchases $95 (waived first year)
Bank of America® Business Advantage Customized Cash Rewards Mastercard® credit card Earn a $300 online statement credit after you make at least $3,000 in net purchases in the first 90 days of your account opening 3% cash back in your category of choice: gas stations & EV charging stations (default), office supply stores, travel, TV/telecom & wireless, computer services or business consulting services and 2% cash back on dining (for the first $50,000 in combined choice category/dining purchases each calendar year, then 1%); and unlimited 1% cash back on all other purchases $0

4. Get a D-U-N-S Number

A D-U-N-S Number is a unique nine-digit identifier that’s available for free from Dun & Bradstreet, a major business credit bureau. You may benefit from having a D-U-N-S Number because many lenders and companies use it to check your credit profile.

For example, if you want to apply for a small business loan or business line of credit, it makes sense to already have a D-U-N-S Number attached to your business.

5. Monitor and maintain good business credit

The three major business credit reporting agencies, Dun & Bradstreet, Experian, and Equifax, use different credit scoring models, so don’t be surprised if your credit score varies between the three companies.

In general, it’s common to see a business credit rating range from 1 to 100, with a higher score indicating a lower risk of late payments, among other things.

As you build a history of good business credit, you may see your score tick up. However, the process of building business credit isn’t over once you establish a good business credit score. It’s important to maintain a healthy business credit history by continuously monitoring your credit score and reports.

For example, you might use a credit monitoring service, such as Dun & Bradstreet’s CreditMonitor, to receive alerts about inquiries into your business or any changes to your Dun & Bradstreet scores and ratings.

Why is it important to build business credit?

The primary reason you might want to build your business credit history is to open up financial opportunities for your business. Here are a few goals you can work toward that build into this overall theme.

Opens up funding options

Lenders and other similar companies want to work with businesses that have high business credit scores because it represents a lower risk of potential late payments, among other factors.

So building your business credit history could help you qualify for more loans and business credit cards. In addition, a higher business credit score could help you qualify for better terms and/or benefits with different types of credit products.

However, keep in mind that lenders and credit card issuers consider various factors on top of your business credit score when determining your eligibility. This means that having a high business credit score alone doesn’t guarantee you will qualify for a loan or a business credit card.

Separates business and personal credit

The standard process of building your business credit involves a separation of business and personal credit. This could be helpful for separating your personal and business finances, which is especially important for organizing and submitting your taxes each year.

If you use a business bank account and a business credit card, it’s likely much easier to track where all your business income and expenses are. Compare this to using personal bank accounts and credit cards where both business and personal finances are mixed, and you might have a lot more work on your hands to declutter the mess.

Provides a safety net

Having a healthy business credit history and a good business credit score is like a safety net for your business. You could leverage your good business credit score to help access cash and credit during times of need, such as an emergency when you need to order more inventory than normal.

Helps maintain cash liquidity

Your company’s liquidity is a measure of how quickly you could acquire cash or cash equivalents to cover your obligations or liabilities.

You could have increased cash flow if you have access to loans and/or business credit cards, thanks to a high business credit score and other factors that go into determining your eligibility. And with increased cash flow, you could more easily maintain your business’ cash liquidity.

4 common mistakes to avoid when building business credit

Avoid these common mistakes if you want to build and maintain a healthy business credit history and score.

1. Missing payments

One of the main factors involved in determining your creditworthiness is whether you make your payments on time, such as loan and credit card payments. If you frequently make late payments, lenders will be less likely to want to work with you.

Your on-time payment history is also a huge factor in determining your business credit score. You can expect your score to go down if you have any delinquent payments.

2. Applying for too much credit

Your business credit reports, or business credit files, show a history of your dealings with different lenders, including any credit accounts you’ve applied for or opened. In most cases, a hard inquiry into your credit report happens every time you apply for credit, whether you’re approved or not.

Hard inquiries tend to have a small impact on your credit score, but it’s usually not a big deal unless you rack up a lot of inquiries over a short period of time. This could have a larger impact on your credit score and make lenders wary of working with you.

3. Not monitoring credit

In an ideal world, there would be no mistakes with credit reporting and credit scores. But mistakes happen, which is why it’s important to consistently check your business credit reports for any errors that might be affecting your credit score.

For example, you might have inquiries on your report that you never authorized. Disputing and having these inquiries removed could help improve your business credit score.

4. Working with non-reporting vendors

Not every vendor or company out there reports business activity to business credit bureaus. So you could be working with a vendor that offers tradelines, yet doesn’t report your on-time payment information to a credit bureau. This doesn’t help you build your business credit history.

It makes sense to check whether a vendor reports applicable activity to the major credit bureaus since you likely want to take advantage of improving your credit score with responsible credit usage.

Business credit FAQ

Does an LLC have its own credit score?

A limited liability company (LLC) typically has its own business credit score because it’s a business entity that’s separate from your personal credit score. This is different from a sole proprietorship, which isn’t a separate business entity, so you might not have a business credit score unless you register your business and request a D-U-N-S Number.

How long does it take to build business credit?

It can take a few months before new business activity starts to appear on your credit reports and your credit score is assigned. But there’s no standard amount of time for the process of building a healthy business credit profile, as it depends on your business activity and whether business credit bureaus have access to your information.

Can I get a credit card in my business’s name with bad credit?

Yes, you may qualify for a business credit card even if you have bad credit. Choosing the right card for your situation can help improve your chances of qualifying. Look for business credit cards with easier requirements.

Keep in mind that you don’t need to use a business credit card for business expenses. You can also use a consumer card for business expenses.

Building business credit fast: bottom line

Similar to building your personal credit history, building business credit is a process. It could take a few months or more before you start seeing activity reported to business credit bureaus. And it might take years before you establish a good business credit score.

But following the steps outlined above can help you learn how to quickly get started with this process so you can work toward opening up more financial opportunities for your business. This can include better business loans and credit cards. However, keep in mind that your business credit score is one of several factors that lenders and credit card issuers consider when deciding whether to grant you a loan or a business credit card.

For our top recommended cards for small business owners, check out the best business credit cards.

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Author Details

Ben Walker, CEPF, CFEI® Ben Walker, CEPF, CFEI®, is a Senior Credit Cards Writer at FinanceBuzz. For over a decade, he's leveraged credit card points and miles to travel the world. His expertise extends to other areas of personal finance — including loans, insurance, investing, and real estate — and you can find his insights on The Washington Post, Debt.com, Yahoo! Finance, and Fox Business.

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