A business credit score is a number that summarizes how reliably a company pays its bills, and lenders and suppliers may check it before they work with you.
What a business credit score is
Unlike a personal score, a business credit score is tied to your company. Different agencies use different scales and different methods, so there is no single number everyone sees. This article is general information, not financial advice. The Consumer Financial Protection Bureau explains credit basics in plain language, and a lender can tell you which reports it uses.
- Tied to the business, not only the owner
- Several agencies, each with its own scale
- Lenders and suppliers may check it
Why it matters to lenders and suppliers
A stronger business credit score can help when you apply for financing, negotiate payment terms with suppliers or rent space. Many new owners start out relying on personal credit, which often means a personal guarantee. Building separate business credit over time can reduce that dependence. Our guide on business funding options shows where credit fits.
- Better odds with lenders and suppliers
- Less reliance on personal credit over time
- More favorable terms in some cases
How to start building a business credit score
Set up the basics first. Form your business properly, get an EIN, and open a business bank account so your records are separate. Our guides on legal basics for starting a business, getting an EIN and opening a business bank account cover those steps. Then use a few trade accounts or a business credit card carefully, and pay on time.
- Form the business and get an EIN
- Use a business bank account
- Pay every bill on time
Habits that help build credit
Pay early when you can, keep balances low compared with limits, and avoid opening many accounts at once. Check your reports for errors and dispute mistakes. Keep your business name, address and phone number consistent everywhere, because mismatches can confuse reporting.
- Pay early or on time
- Keep balances low
- Keep your details consistent
Mistakes to avoid with business credit
Be careful with companies that promise to “fix” or “boost” credit for a large fee. You can check your own reports and build credit with steady habits. Our guide to business opportunity scams lists warning signs. Also avoid mixing personal and business spending, since that can cause legal and tax problems.
- Fees for credit “repair” promises
- Mixing personal and business spending
- Missing payments on a line of credit
Checking your business credit score
Ask the agencies which reports they hold on your business and what they charge. Prices and access vary. A lender will tell you which report it checks, and the local SBDC can help you interpret what you find.
- Request your reports
- Review them for errors
- Ask your lender which report matters
Related reading on the business credit score
- Business Funding Options: A Plain-English Guide for New Owners
- Business Line of Credit: How It Works and What to Ask
- How to Open a Business Bank Account
- How to Get an EIN for Your Business
- Legal Basics for Starting a Business: A Checklist
- Business Opportunity Scams: 12 Red Flags to Check
- Consumer Financial Protection Bureau
- America’s SBDC small business advising
- SCORE free business mentoring
- SBA Lender Match
