3 Easy Steps to Build Your Business Credit

Building Business Credit is Easier Than You Think

Whether you're running a startup, or have an already established business, you may have expenses, investments, or development plans that require more capital than you have on hand. Having access to funding can play a critical role in success for many business owners. Finding lenders to invest in your business may prove to be a challenge if you have a low personal credit score, but there are ways to separate your personal credit score from your business. Establishing business credit will help increase your credibility with lenders, and improve your chances to get approved for business funding. With a good business credit score, you'll see that it's easier to find investors who are willing to work with you. 

If you're not sure where to start, we'll walk you through the process and explain how to build business credit fast. These are 3 easy steps to start establishing business credit right now and work towards achieving a high business credit score quickly.

How to Build Business Credit Easily:

1. Obtain your EIN 

If you haven't already, you'll need to get your company's EIN (Employer Identification Number). Some business structures are not legally required to obtain an EIN, but having one will be necessary if you're looking for funding. Even if you're the only member of your business and don't have plans to hire anytime soon, you'll still need an Employer Identification Number, as this will be a requirement on every credit application you complete. To obtain your company's EIN, do not use a third-party; getting your EIN is completely free through the Internal Revenue Service, and when you apply online, you'll have it within minutes. You'll need your business entity type (LLC, Corporation, S-Corp, etc.), business location, ownership information, and the month and year your entity was registered. 

The online application is available Monday-Friday, from 7 a.m.- 10 p.m. EST. 

This link will take you directly to the IRS website to apply:

 https://www.irs.gov/businesses/small-businesses-self-employed/get-an-employer-identification-number 

2. Apply for a D-U-N-S number

Your business credit profile won't be complete without a Paydex score and to get one, first you'll need your DUNS number. Your D-U-N-S number is the unique ID given to your business through the Data Universal Numbering System, provided by Dun & Bradstreet (D&B), one of the main business credit bureaus. This will be the number lenders use to pull your business credit report and assess your company's credit rating. You can claim your DUNS number through Dun & Bradstreet's website. Once you submit your information, the site will do a search for your business. You may find that you've already been assigned a DUNS number. This could be from another party (such as a supplier or lender) making an inquiry about your business, triggering D&B to issue a credit profile. If you don't have a DUNS number, you can apply online for free. You can pay for an expedited application, but that may not be necessary ; although the website says they could take up to 30 business days, DUNS numbers are typically issued much quicker than that.

You can search and apply through the link below:

https://www.dnb.com/en-us/smb/duns/get-a-duns.html  

3. Create Net 30 accounts

Once your business has established a credit profile, you'll need to start building your business credit score. The fastest and easiest way to build business credit is by working with Net 30 vendors. These are merchants that are typically willing to work with companies without a minimum credit score. Most Net 30 vendors offer tradelines to new businesses with an easy application process and high approval ratings. It's important to do your research and choose vendors that report to the 3 main business credit bureaus: Dun & Bradstreet, Equifax, and Experian (the "big three"). 

Once your business has been approved for a Net 30 account, the vendor will offer a credit line to purchase products or services directly through them. To activate your tradeline, you must make a minimum purchase using a Net 30 payment plan; this will give you 30 days to pay for your purchase, but you can increase your score further by making a payment sooner (best practice is to pay within 15 days). Remember that just like your personal credit score, it's important to maintain low credit utilization. Net 30 vendors know this, and most will offer a high credit line with a low minimum purchase to help build your business credit score. When it comes to building your business credit, it's best to only purchase the minimum amount required, and then pay off your balance quickly. 

You will need at least two tradeline accounts to receive a business credit score. Once you have two tradeline accounts with at least three payments each, Dun & Bradstreet will issue a Paydex score for your business 🎉

To find Net 30 Vendors with easy approval, check out our list here:

Easy Approval Net 30 Vendors 

If you need business funding but have bad personal credit, you can create a separate credit profile for your business and easily get approved for credit lines by applying for Net 30 tradeline accounts. Most Net 30 vendors have no minimum credit score requirement, and are here to help you build your business credit score quickly and easily. Once you have your EIN and DUNS number, you can apply for Net 30 accounts and easily get approved for business credit the same day. By building business credit, you can separate your business from your personal credit score and get approved for business funding even if your personal credit score is low. 

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