What is business credit, and how do you build it?

Business credit files are maintained separately from personal ones, by agencies including Dun & Bradstreet, Experian Business, and Equifax Business, each using its own scoring model. Dun & Bradstreet's PAYDEX score, for example, runs on a different scale from consumer scores and is driven heavily by payment timeliness against agreed terms. Unlike consumer credit reports, business credit files are generally available to anyone willing to pay for them, which means suppliers, insurers, and prospective partners can see your payment history.

Building a file follows a sequence. Form an entity and obtain an EIN, since a sole proprietor's activity generally attaches to their personal credit. Obtain a D-U-N-S number from Dun & Bradstreet, which is free. Open a business bank account and a business credit card in the company name. Then establish trade lines with vendors and suppliers who report payment history to the agencies, which is the step most owners miss because many vendors do not report and you have to ask. Pay early rather than merely on time, since some business scoring models reward payment ahead of terms rather than treating on-time as the ceiling.

Two expectations worth calibrating. Personal guarantees are near-universal for small business borrowing regardless of business credit strength, meaning you remain personally liable and the debt may appear on your personal credit, and escaping that generally requires years of history and substantial revenue. And the industry marketing promising to build business credit quickly, or to obtain financing with no personal guarantee and no revenue, is dense with low-value programs. The genuine path is unremarkable: an entity, separated finances, reporting trade lines, consistent early payment, and time.