How to build business credit

It is a different system entirely

Personal credit runs through Experian, Equifax and TransUnion. Business credit runs through Dun & Bradstreet, Experian Business and Equifax Business — different bureaus, different identifiers, different scoring.

The most important practical difference: business credit reporting is largely voluntary. A supplier who extends you terms is under no obligation to report it. You can pay every invoice early for three years and have an empty file if none of them reported.

Nothing happens automatically. If you do not check who reports, you may build nothing at all.

The scores you will meet

Three matter most, and they measure different things:

• PAYDEX (Dun & Bradstreet) — 1 to 100, based purely on payment timing. 80 means paying on the due date; above 80 requires paying EARLY, which is the part most people miss
• Experian Intelliscore Plus — 1 to 100, predicting serious delinquency risk
• Equifax Business Credit Risk Score — 101 to 992, predicting severe delinquency

The order that works

Each step depends on the one before it. Done out of order, the later steps have nothing to attach to.

• Register the business properly — LLC or corporation, not a sole trader operating under your own name, so there is a legal entity to hold the file
• Get an EIN from the IRS. It is free and takes minutes at irs.gov
• Open a business bank account in the exact registered name
• Get a D-U-N-S number from Dun & Bradstreet. Also free. Without it there is no D&B file to build
• Make the business findable and consistent — address, phone and name identical everywhere, because the bureaus match records on exactly that
• Open accounts with suppliers that report
• Pay early, not just on time
• Add a business credit card once there is a file for it to sit against

An EIN is not a credit file

This is the most common misunderstanding. An EIN identifies your business to the IRS. It does not create a credit file, it does not score anything, and applying for one does nothing for your credit whatsoever.

The file comes into existence when someone reports to a business bureau under your business identity. Until that happens there is nothing to score.

Find out who actually reports

Before opening a supplier account, ask one question: do you report to Dun & Bradstreet, Experian Business or Equifax Business?

Ask the supplier directly. Lists circulate online claiming to name reporting vendors and they go out of date constantly — companies start and stop reporting without announcement. A supplier’s own answer today beats a blog post from two years ago.

Net-30 terms from a supplier that reports are worth more to your file than a larger account with one that does not.

Pay early, not on time

PAYDEX is unusual in rewarding early payment specifically. Paying on the due date gets you 80. Getting meaningfully above that requires paying before it.

Since PAYDEX is weighted by dollar value, a large invoice paid early moves it more than a small one. Sequence matters: if cash is tight, paying the biggest invoice early does more than paying three small ones.

Personal credit still follows you

Building business credit does not detach you from your personal file, and expecting it to is how people get caught out.

Most lenders to small businesses — particularly for the first few years — check the owner’s personal credit and ask for a personal guarantee. A personal guarantee means you are liable if the business cannot pay, and the debt can appear on your personal report.

Build both. They are not alternatives.

Keep the two genuinely separate

Separation is what makes the business file credible, and it is also what protects the legal shield your entity is supposed to provide:

• Business expenses on business accounts, always
• No personal spending on the business card, even briefly
• Business name, address and phone identical on every registration and invoice
• Do not share an address format — “Suite 4” and “#4” can create two records the bureaus never merge

How long it takes

Longer than most expect. A file typically needs several reported accounts over several months before a score appears, and lenders generally want to see a track record beyond that.

Timelines vary by bureau, by how quickly suppliers report, and by how much activity there is. No one can promise a score by a date, and scoring criteria are set by the bureaus, not by us.

Checking your business file

Each business bureau sells access to its own reports, and unlike personal credit there is no single free federal source. Check them periodically — business files carry errors just as personal files do, and a wrong entry sits there until somebody notices.

Storehouse’s business credit tools are on the Elite plan.