Effective Strategies for Building Business Credit from Scratch

If you’re starting a business or have recently established one, building business credit may seem like a hurdle—especially if you have no previous credit history. However, building business credit from scratch is not only possible, it’s a must for long-term growth. You’ll not only improve your ability to qualify for loans but also secure better vendor terms and lower insurance premiums. Done correctly, it separates your personal finances from your company’s.

Key Takeaways

• New businesses can establish credit without prior history by starting with foundational steps like incorporating and obtaining a D-U-N-S Number.
• Opening business accounts, applying for starter trade lines, and maintaining timely payments should be done at once.
• Regular monitoring of your business credit report helps ensure accurate reporting and faster credit growth.
• Expert help can streamline the process and reduce mistakes that delay progress.

Step 1: Form a Legal Business Entity

To begin building credit, your business must first exist as a separate legal entity. Sole proprietors can’t establish separate business credit because their finances are tied to their personal identity. Instead, consider forming an LLC or corporation.

Why It Matters:

• Creates legal separation between you and your business
• Allows you to open business bank accounts
• Enables reporting to commercial credit bureaus

Pro Tip: Form your LLC or corporation in a state with business-friendly laws like Nevada, which offers strong asset protection and minimal disclosure requirements.

Step 2: Get an Employer Identification Number (EIN)

An EIN functions like a Social Security number for your business. You’ll need it to open a business bank account and file taxes. It may also be required during credit evaluation.

How to Apply:

• Visit the IRS EIN Application Portal
• Request professional assistance from NCH

Step 3: Obtain a D-U-N-S Number

A D-U-N-S Number lets you begin building a business credit file. This number identifies your company and is required by many vendors, credit bureaus, and government contracts.

How to Get One:

• Apply for free at Dun & Bradstreet’s website
• It can take up to 30 business days unless expedited

Step 4: Open a Business Bank Account

Opening a dedicated business checking account not only signals legitimacy but also provides the foundation for financial records, future loans, and vendor accounts.

Benefits:

• Separates business and personal finances
• Helps with accurate tax filing
• Improves trust with partners and banks

Pro Tip: Choose a bank that reports to business credit bureaus and offers products like secured business credit cards for new companies.

Step 5: Establish Your Business Address and Phone Number

Credit bureaus look for consistency in your business’s presence. Establishing a business address, phone number, and website builds credibility.

Tips:

• Use a physical business address (avoid PO Boxes)
• Get a dedicated business phone line
• Register your business on Yellow Pages and Google Business Profile

Step 6: Register With Business Credit Bureaus

Major credit bureaus that track business credit include:

• Dun & Bradstreet
• Experian Business
• Equifax Business

Some bureaus automatically create a profile when you apply for a D-U-N-S Number or open a credit account. However, you can also register proactively.

Step 7: Apply for Vendor Accounts That Report to Credit Bureaus

Start with Net-30 vendor accounts—these allow you to buy now and pay within 30 days. Choose vendors that report to the credit bureaus, as not all do.

Recommended Starter Vendors:

• Uline (shipping and packaging supplies)
• Grainger (industrial supplies)
• Quill (office supplies)
• Summa Office Supplies

Start with small orders and pay off balances early or on time.

Step 8: Get a Business Credit Card

Once you have a few vendor accounts and your business credit profile is initialized, apply for a business credit card. Start with a secured card if necessary.

Benefits:

• Builds credit faster
• Separates business expenses for accounting
• Earns cash back or travel rewards

Make sure the credit card provider reports to the business credit bureaus.

Step 9: Monitor Your Business Credit Reports

Just like personal credit, regular monitoring helps you spot errors, track your progress, and identify opportunities for improvement.

How to Check:

• Dun & Bradstreet Credit Monitor
• Nav.com (aggregates multiple bureau reports)
• Experian Business Credit Advantage

Set up alerts for score changes or new accounts added to your file.

Step 10: Maintain Timely Payments and Low Balances

Once your business has open credit accounts, you must maintain strong credit behavior.

Credit-Building Habits:

• Pay all bills early or on time
• Keep credit utilization low
• Avoid closing old accounts

Scores to Track:

• PAYDEX Score (D&B) – based on payment timeliness
• Intelliscore Plus (Experian) – predicts payment default risk
• Business Credit Score (Equifax) – rates the likelihood of delinquency

Pro Tip: A PAYDEX score of 80 or higher indicates excellent creditworthiness and opens doors to larger funding opportunities.

Frequently Asked Questions (FAQs)

How long does it take to build business credit from scratch?

Generally, you can begin seeing results within 3 to 6 months if you follow the correct steps and vendors report promptly.

Can I build business credit with bad personal credit?

Yes. Your personal credit is not always considered, especially when using vendor credit and business-only credit lines.

Do I need a D-U-N-S Number to get business credit?

Yes, especially with vendors and lenders who report to Dun & Bradstreet. 

What’s a good PAYDEX score?

A score of 80 or above indicates prompt payment history and is considered strong by lenders and suppliers.

Which credit card is best for businesses with no credit history?

Secured business cards or cards from banks that cater to startups, such as Brex or Capital One Spark, are good entry points.

What’s the difference between personal and business credit?

Personal credit is tied to your SSN; business credit is tied to your EIN and business entity, and it tracks the creditworthiness of your company.

What are Net-30 accounts?

These are vendor accounts that give you 30 days to pay for products or services. They’re ideal for building initial trade lines.

Will my LLC automatically have a credit profile?

No. You need to actively establish your business credit by obtaining a D-U-N-S Number and using reporting vendors.

Do banks report business credit activity?

Not all do. Make sure your business bank or credit card provider explicitly reports to business credit bureaus.

Can I use a virtual address for my business?

Yes, but credit bureaus prefer a physical address. Virtual addresses are acceptable if they’re tied to real office locations (e.g., Regus, DaVinci).

Expert Tips From NCH

1. Start early: The sooner you start building business credit, the faster you can access loans, lines of credit, and supplier deals.
2. Structure matters: A properly formed LLC or corporation gives you the credibility and legal foundation to pursue credit opportunities.
3. Don’t mix funds: Always separate personal and business finances. It’s key to maintaining liability protection and credible financial records.
4. Leverage tools like Nav or CreditSignal to monitor your progress and detect inaccuracies in real time.
5. Work with professionals: Getting expert help avoids common pitfalls, speeds up your credit timeline, and maximizes funding potential.

Credit Is Leverage

Starting a business with no credit history doesn’t mean you’re stuck. By forming your entity, obtaining key identification numbers, opening accounts, and establishing trade lines, your business can build a strong and independent credit profile within months. The earlier you begin, the sooner your company can scale with less reliance on personal assets or guarantees.

Let’s Build Yours

NCH is one of the nation’s leading business formation and credit-building firms. Our team integrates proven credit-building strategies with expert legal and compliance support. From securing your D-U-N-S Number to connecting you with vendors that report to the right bureaus, we will guide you step-by-step so your business has the funding power it needs to grow.

Call us at 1-800-508-1729 for expert insights on business credit and more!

DISCLAIMER: The above material has been prepared for informational purposes only, containing opinions of the provider and is not intended to provide, and should not be relied on for, tax, legal, or accounting advice. Please consider consulting tax, legal, and accounting advisors before engaging in any transaction.