Whether you’re a startup or a legacy brand, a good business credit score is crucial for securing the funding needed for growth.
Ok, but what is a business credit score?
Like a personal credit score, a business credit score reflects your creditworthiness based on your credit history and is built over time based on several factors. Essentially, it reflects how reliably your business has paid what it owes, under its own name and EIN.
Why is Business credit So important?
Visibility: your business credit file is accessible to vendors, financial institutions, and potential business partners — it’s part of the picture they see when they look at your business.
Negotiating Power: a track record of on-time payments gives you something concrete to point to when asking vendors for longer payment terms, which helps with cash flow management.
Separation: business credit lives under your business’s own name and EIN, separate from your personal credit history. Building it keeps your business standing on its own record.
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First and foremost, begin by checking whether your business has an existing credit report. With Tento you can see your Equifax business credit score for free. Checking is a soft inquiry, so it never affects your score. If a file exists, you’ll see your score and the credit activity reported about your business. If nothing comes back, that’s common too: a file only exists once someone reports payment activity about your business.
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If your business doesn’t have any credit history, here are the steps to take to establish it:
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Incorporate your business or form an LLC to separate your personal and business identities.
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Obtain a federal Employer Identification Number (EIN) from the IRS.
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Open a business bank account under your business’s legal name.
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Get a dedicated business phone line listed under your business name.
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Keep your details consistent everywhere. State registrations, tax filings, bank accounts, vendor accounts: same legal name, same address, same EIN. Reported payments are matched to your business by these details, and mismatches are the most common reason activity never comes together into one file.
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Open net-30 accounts with vendors that report payments. Suppliers you already buy from, like office supplies, shipping, or building materials, often offer net-30 terms, and when the vendor reports to a bureau like Equifax, every on-time payment builds your file. Ask vendors directly whether they report before opening the account.
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Another way to build your business credit profile is opening a business credit card account. Before applying, ensure that the card issuer reports your payments to the business credit bureaus so your hard work and diligence is not wasted!
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Monitor your score and give it time. Most business credit files take 6 to 12 months of reported payments to appear. Nothing about this is instant, and anyone promising to build your business credit in weeks is selling something. Tento re-checks Equifax every month and emails you the moment a file appears or something changes, so you don’t have to keep checking manually. For the full playbook, see our guide on how to establish a business credit file.
“Good things come to those who wait–and that certainly applies to establishing good business credit.”
