How do you build business credit?

Building business credit is a 6-step sequence: (1) form a legal entity (LLC or Corp) separate from yourself; (2) get an EIN from the IRS; (3) open a business bank account in the entity's name; (4) register for a free DUNS number from Dun & Bradstreet; (5) establish trade lines with vendors who report to the three business credit bureaus (Dun & Bradstreet, Experian Business, Equifax Business); (6) open a secured business credit card and use it disciplined. Building a meaningful PAYDEX score takes 6-12 months of on-time reporting.

Why business credit matters

Business credit is a separate credit profile for your business — tracked by Dun & Bradstreet, Experian Business, and Equifax Business — distinct from your personal credit. Strong business credit unlocks: better loan terms, higher credit limits, lower deposit requirements with suppliers, no-personal-guarantee financing for established businesses, and the ability to scale capital access without personal credit risk. The Federal Reserve Small Business Credit Survey 2024 tracks how SMBs use business credit alongside personal credit at application.

The 6-step business credit building sequence

Form a legal entity (LLC or Corporation). Sole proprietorships can't build business credit separate from personal credit — there's no legal separation between you and the business. Form an LLC or S-Corp through your state Secretary of State.
Get an Employer Identification Number (EIN) from the IRS. Free at irs.gov/businesses/small-businesses-self-employed/apply-for-an-employer-identification-number-ein-online. Takes 15 minutes online.
Open a dedicated business bank account in the entity's legal name. Run all business income and expenses through it. Banking activity is a foundational input to business credit scoring.
Register for a free DUNS number from Dun & Bradstreet. Apply at dnb.com/duns-number/get-a-duns.html. Free, takes ~30 days to issue. This is your business's identifier across D&B's credit reporting system.
Establish trade lines with reporting vendors. Net-30 vendors (Uline, Quill, Grainger, Crown Office Supplies) extend trade credit and report to D&B. Open accounts, buy small amounts ($100-500/month), pay early (before the net-30 due date). Targeting 5+ reporting trade lines in the first 6 months.
Open a secured business credit card that reports to business bureaus. Not all business credit cards report; confirm before applying. Use the card disciplined: maintain utilization under 30% and pay on time monthly.

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The three business credit bureaus

Unlike personal credit (where Experian, Equifax, TransUnion compute similar FICO-style scores), the three business credit bureaus use distinct scoring models:

Dun & Bradstreet — PAYDEX Score (0-100): 80+ = pays on or before terms. The most-cited business credit score in lending decisions.
Experian Business — Intelliscore Plus (1-100): lower = higher risk. Used heavily by trade-credit decisions.
Equifax Business — Business Credit Risk Score (101-992): lower numbers = higher risk of severe delinquency.

Timeline to a meaningful score

Realistic timeline expectations: 30 days from EIN-to-DUNS issuance, 60-90 days for the first trade line reports to appear, 6 months for a meaningful PAYDEX score (80+ requires consistent reporting), 12-24 months to qualify for no-personal-guarantee business financing. Sub-680 personal FICO doesn't automatically block business credit building — but lenders may still pull personal credit at underwriting for sub-2-year businesses regardless of business credit score.

Common mistakes to avoid

Three mistakes that delay business credit progress: (1) mixing personal and business finances — every personal-card swipe through a business account weakens the separation; (2) using vendors that don't report to bureaus — trade activity without reporting builds nothing; (3) closing your oldest trade line — credit history length matters for business credit just like personal credit. The Consumer Financial Protection Bureau Section 1071 rules now require lenders to report small business credit application demographic data — federal-level visibility into how SMB credit decisions get made.

Authoritative sources

IRS provides free Employer Identification Number (EIN) registration online — typically issued immediately. The EIN is foundational to all business credit building. — IRS.gov
Dun & Bradstreet issues free DUNS numbers (the business identifier used in PAYDEX scoring) — application typically processed within 30 days. — Dun & Bradstreet
CFPB Section 1071 (Small Business Lending Data Collection Rule) requires commercial lenders to collect and report demographic data on small business credit applications — federal-level visibility into SMB credit decisions. — CFPB Section 1071
Federal Reserve Small Business Credit Survey 2024 reports SMBs with both personal AND business credit at application have meaningfully higher approval rates than those with personal credit alone. — Fed SBC Survey 2024

Key takeaways

6-step sequence: form LLC/Corp → EIN → business bank account → DUNS → vendor trade lines → secured business card.
Three business credit bureaus with distinct scoring models: D&B (PAYDEX), Experian Business (Intelliscore), Equifax Business (Risk Score).
Meaningful PAYDEX 80+ takes 6 months of consistent on-time reporting from at least 5 trade lines.
No-personal-guarantee business financing typically requires 24+ months in business + strong business credit + DSCR coverage.
Common mistakes: mixing finances, using non-reporting vendors, closing oldest trade lines.
Related: How to Get a Business Loan — Step-by-Step Walkthrough | Credit-building toolkit — rebuild your score and unlock better financing