How to build a better business credit score

Most business owners utilize some type of debt financing to grow their business. Experts agree that keeping personal and business finances as separate as possible is paramount, and establishing a strong business credit score is the best way to ensure you won’t have to lean on your personal finances to keep your business afloat.

What is a business credit score?

A business credit score works similarly to your personal score in that it provides credit agencies, loan issuers, and vendors/suppliers a general idea of how trustworthy you are when it comes to borrowing money. The higher your score, the more lenders can trust that you’ll pay your bills on time.

What credit score should businesses aim for?

According to, there are three main business credit scores and reporting agencies: Dun & Bradstreet, Experian, and FICO. These three agencies each use a different scoring system to determine your score, and different credit sources use different agencies to determine whether or not your business is financially trustworthy.

How to establish business credit

  1. Establish a separate legal entity for your business.
  2. Apply for a business credit card (and use it).
  3. Ask for credit terms from vendors.

Improving your business credit score

  1. Pay your bills on time
  2. Keep your personal score healthy
  3. Aim for a low utilization ratio on all of your open lines of credit
  4. Keep multiple credit accounts open

The more trustworthy your business is seen by vendors, suppliers, and credit reporting agencies, the more financial freedom your business will have. You’ll be eligible for larger loans, higher credit limits, better benefits from better business cards, and better credit terms on lines of credit with vendors.

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