How Do I Build Business Credit? (Experian)

Dear MKT,

The first step to establishing business credit[1] is to legally register your business. For small businesses, one option is to form an LLC (limited liability company) to ensure your company is seen as a separate business entity. Once you do that, you can begin to apply for business accounts in your company’s name.

If your business is a sole proprietorship, you will need an employer identification number (EIN) to establish business credit.

Establishing Business Credit

When you open an account such as a business credit card[2] or loan[3] in your company’s name, those lenders will begin reporting the accounts and payment history to the three business credit bureaus: Experian, Dun & Bradstreet (D&B) and Equifax. Experian will create a business credit file that lenders and partners can request to determine risk when doing business with you.

If there are any public records associated with your business, such as a judgment, lien or bankruptcy, those will be part of your business credit history as well.

Finally, demographic information such as years on file, Standard Industrial Classification (SIC) code and business size are also part of your business credit report.

The key to establishing a positive business credit history is to make sure you make all of your payments on time and keep your credit utilization[4], or amount of available revolving credit, low.

How Do I Get My Business Credit Report?

You can visit Experian’s website[6] to order a copy of your business’s credit report. Experian also offers a credit monitoring service called Business Credit Advantage[7] that can help you stay on top of your business credit history and business credit score. It provides alerts to any changes in your report and tips for improving your company’s credit standing.

What’s in a Business Credit Report?

A business credit report contains some of the same elements as your personal credit report. It includes:

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