7 Steps to Build Your Business Credit

(3 Minute Read) —  As a small business owner, you know success takes more than hard work. It requires a smart financial plan, which includes establishing strong business credit.

With good credit, your business can:

• Qualify for loans and lines of credit with better terms
• Negotiate favorable payment terms with vendors
• Invest in opportunities like equipment, inventory, and marketing

Establishing solid business credit doesn’t happen by accident; it requires intentional actions and time. Consider these steps to help grow your business credit.

1. Make Your Business Official

Before you can develop business credit, your business must be legally recognized as a separate entity.

• Register as an LLC or corporation through your state’s business portal.
• Get an Employer Identification Number (EIN) from the IRS.
• Open a business checking account in your company’s name.
• Set up business contact details (address, phone, email, website) to build credibility.

Tip: Connect with your credit union for affordable business checking and hands-on support as you get started.

2. Avoid Mixing Personal and Business Finances

Keeping your personal and business finances separate protects your personal credit, improves financial clarity, and makes tax time easier.

• Deposit all income into your business account, and use it to pay business expenses.
• Avoid using personal credit cards for business purchases (and vice versa).
• Pay yourself from your business account.

Tip: Ask your credit union team to help you set up the right mix of accounts to keep your finances clean and organized.

3. Get a Business Credit Card

Using a business credit card wisely is a practical and effective way to build a strong credit history for your company.

• Choose a card that reports to business credit bureaus like Dun & Bradstreet, Experian Business, and Equifax Business.
• Use it regularly for business expenses, and pay in full each month.
• Keep your credit utilization under 30% of your limit.

Tip: Open a business credit card with your credit union to get competitive rates, useful rewards, and no hidden fees.

4. Choose Vendors Who Report Credit

Vendors that report your on-time payments to credit bureaus can help you build credit faster.

• Confirm which vendors report payment history to credit bureaus.
• Negotiate payment terms like Net 30 or Net 60 (which give you 30 or 60 days to pay after receiving an invoice).
• Pay invoices on time or early.

Tip: Make timely payments, not only to build credit, but to strengthen your reputation with vendors.

5. Monitor Your Business Credit Reports

Just like with personal credit, regular monitoring helps you protect your reputation and spot issues early.

• Set a reminder to check your reports with Dun & Bradstreet, Experian Business, and Equifax Business.
• Review for accuracy, including names, addresses, balances, and payment history.
• Dispute any errors immediately.

Tip: Use free or low-cost monitoring services from credit bureaus to stay informed.

6. Borrow Responsibly to Build Credit

Use loans and lines of credit strategically to help grow your business credit profile.

• Borrow only what you need, and have a clear repayment plan.
• Automate payments to ensure you never miss one.
• Maintain a low credit utilization ratio.

Tip: Talk to your credit union about your options for a low-rate business loan or a flexible line of credit that fits your needs.

7. Stay Consistent Over Time

Business credit isn’t built overnight, but steady, responsible habits pay off.

• Keep making payments on time to build trust.
• Nurture strong relationships with vendors, lenders, and partners.
• Focus on delivering value to customers and growing your brand.

Tip: Regularly review your progress to celebrate wins and adjust strategies.

Your Local Partner in Business

At Unitus Community Credit Union, we’re proud to support small business owners like you. Whether you’re just starting your business or preparing to grow, we’re here with tools, resources, and personal service to help your business thrive. Contact us today to build your business credit—and move forward with confidence.

Unitus Community Credit Union
Where everyone, every moment matters.