How to Build Business Credit in 30 Days
Similar to personal credit, most business credit score goals can’t be reached in 30 days. It is good to set those goals though and work towards them.
However, you can make solid progress and give your company the momentum it needs within this time frame.
In this post, we’ll explain how to build business credit in 30 days and cover specific strategies and tools to maximize your business credit score.
1. Establish a Firm Business Identity
First, you’ll want to handle the fundamentals associated with establishing your business identity.
This starts with getting a business name, address, and phone number, and choosing a business structure, such as an LLC or corporation. To be clear: a business should have a totally different identify from its business owner.
You can find a helpful resource we’ve created choosing a business structure here, based on information from the SBA and other reputable sources.
Doing this makes it so your business can be reported to business credit bureaus and gives you credibility in the eyes of government agencies, lenders, vendors, suppliers, and credit card companies.
Once you’ve got this setup, you’ll be in a position to start opening accounts so you can officially start building business credit. Vendors can then report your payment history to a business credit bureau like Dun & Bradstreet, Experian Business, or Equifax Business.
Like personal credit, as long as you make payments on time or in advance, this should jumpstart your business credit history and you’ll be able to establish good credit fairly quickly.
But it all starts with taking care of the business identity formalities like getting a business name, address, and phone number and choosing a business structure.
The quicker you do that, the faster you can start building business credit.
2. Get an EIN
An employer identification number (EIN) is the equivalent of a Social Security number for your business. It has two main purposes.
First, the government uses your EIN to identify your business, and it’s necessary for paying your business taxes (just like an SSN is necessary for paying your personal taxes).
Second, you’ll need an EIN to open a business bank account (more on this later), and many lenders, vendors, and suppliers require one as well.
As we mentioned before, a big part of rapidly building business credit is opening accounts and having vendors report your payment history to business credit bureaus.
You can apply for an EIN online through the IRS website as long as your business is located in the US or within US Territories.
All of the information you need can be found here, and the process requires three steps:
Determine your eligibility
Complete the online application in one session
Submit your online application
Once the validations are completed, you’ll immediately get your EIN, and you can download, save, or print the EIN confirmation notice.
3. Get a DUNS Number
“The Dun & Bradstreet DUNS number is a unique nine-digit identifier for businesses. DUNS numbers are often referenced by lenders and potential business partners to help predict the reliability and/or financial stability of a company.”
It’s important to get a DUNS number because Dun & Bradstreet is a major business credit reporting agency that contributes heavily to generating a business credit score.
Also, potential lenders, vendors, suppliers, and credit card companies will often use your DUNS number to assess your company profile, financial health, and overall trustworthiness before partnering with you.
And as Dun & Bradstreet points out, having a DUNS number helps “expedite applications for loans and contracts.”
If you’re a new business owner looking to build credit fast, having a DUNS number is a must.
Fortunately, getting one is pretty straightforward and can be done conveniently online through the Dun & Bradstreet website.
You can apply for a DUNS number here.
4. Get a Separate Business Bank Account
Next, you’ll want to separate your business credit from your personal credit by creating a business bank account.
There are two main reasons why.
One, it allows you to build a relationship with a banking partner, which can open the door to getting a business loan and a business credit card. In turn, you should be able to increase your cash flow to better fund business growth.
Two, it establishes a financial track record with a bank, which is important for business owners quickly building business credit.
By having a bank account in your business’s name it will be easier to distinguish business purchases from personal ones. Your tax accountant will also thank you for doing so come tax season.
As long as you manage your business bank account responsibly and follow best practices like making payments on time and sticking to reasonable credit utilization, you should be able to achieve a good business score fairly quickly.
5. Open Business Tradelines
A business tradeline is a credit account that shows up on your business credit report. It could be a vendor tradeline, credit card, loan, or other type of financing.
If you purchased goods or services from a net 30 vendor, for instance, you would have 30 days to pay the invoice with this type of credit line.
One real-life trade credit example is the Business T-Shirt Club, which offers wholesale apparel for small business owners and larger enterprises. They offer net 30 terms, which means a small business owner has 30 days to pay an invoice after making a purchase.
Another is Wise Business Plan, a company that provides professional business planning services, as well as web design and digital marketing. They too have 30 day payment terms, as well as 60 and 90 day options for approved accounts.
Besides increasing cash flow and offering flexible payments, opening business tradelines like these are helpful because many vendors will report your payment history to business credit bureaus.
This operates just like having a consumer credit card where paying on time and following best practices, like smart credit utilization, boosts your personal credit.
In this case, you’re building business credit rather than personal credit.
Net 30 vendors, in particular, are ideal because the payment history gets reported faster than vendors with longer net payment terms, like 60 or 90 days.
If you want to establish a positive business credit history in a hurry, this is an excellent way to do it.
6. Get eCredable Business Lift
Another simple way to quickly boost your business credit score is by using eCredable Business Lift, which reports your business utility and telecom payments to credit bureaus.
If, for example, you have business accounts like electricity, internet, water, gas, and cable or satellite TV, eCredable will report your eligible accounts, enabling you to build your business credit score by simply paying the bills that you would anyway.
In terms of specific business credit bureaus, eCredable reports bill payments to Equifax and Creditsafe. Your eCredable monthly subscription is reported as a Net 30 account to Dun & Bradstreet, Equifax, Creditsafe and Experian.
Upon signing up with eCredable Business Lift, up to 24 months of your business service payment history will be downloaded and reported to participating business credit bureaus, and will continue doing so for as long as you maintain your subscription.
This is one of the fastest and easiest ways for business owners to improve their business credit history with multiple credit bureaus at the same time.
And it’s quite affordable.
There’s just a one-time setup fee of $49.95. Then it’s just $9.95 per month after that.
You can learn more about eCredable Business Lift and its full range of features here.
7. Make Your Payments Early
Making payments on time is an integral part of building business credit.
Whether it’s paying a lender, a vendor, a business credit card, or anything else, this signals trustworthiness and makes you a more desirable borrower.
Note that simply paying business bills on time should raise your credit score. But going above and beyond and making payments early may raise your credit score even faster.
Dun & Bradstreet even says, “One of the best ways to potentially improve your business’s PAYDEX Score is to pay your bills ahead of time.”
So whenever possible, make payments in advance, as this is one of the fundamentals of building business credit.
Not only that, but it can potentially raise your credit limit with a lender or vendor to further increase your cash flow and create a positive cycle.
8. Monitor Your Business Credit
Finally, you’ll want to stay on top of your business credit score just as you would your personal credit score to accelerate the growth of your credit report.
One reason is to simply be aware of the state of your business credit report at all times.
Your credit score constantly fluctuates. And given the impact it has on your ability to secure financing, get favorable loan terms, low-interest rates, and more, you’ll want to know what your credit score is — especially when you’re highly focused on building business credit.
Another reason is that mistakes can be made with your business credit, just as it can with your personal credit. For instance, a vendor or lender may accidentally report inaccurate information to a credit bureau, which could potentially hurt your small business credit history.
If this happens, the faster you address it, the easier it should be to resolve the issue to prevent it from lowering your credit score.
Besides that, there’s always the potential for business credit fraud, which can also lower business credit scores. If wrongly recorded negative information shows up on your credit report, for example, it can damage your credit history even if you didn’t do anything wrong.
Fortunately, monitoring your business credit is pretty simple. You just need to get a credit report from the major credit bureaus like Dun & Bradstreet, Experian, Equifax, and Creditsafe to check for accuracy.
This works similarly to using Credit Karma for monitoring your personal credit score and will quickly alert you of inaccuracies, fraud, or other issues.
You can find more information on business credit monitoring here.
What’s the Fastest Way to Build Business Credit?
Getting a trade credit with net terms from a vendor or supplier that reports to major credit bureaus and making payments early is a highly effective strategy to quickly build business credit and establish a good credit score.
Net 30 terms, in particular, are helpful because your payment history should get reported faster than if there were longer net terms like 60 or 90 days.
Also, using a tool like eCredable Business Lift that reports your business utility and telecom payments should quickly boost your credit report.
The bottom line is that you want to get your payment history reported to one or more major credit bureaus as soon as possible.
How Fast Can You Build Your Business Credit?
Again, building business credit takes time and can’t be done completely in 30 days.
That’s mainly because it typically takes vendors and suppliers at least a month and a half to report your payment history to credit bureaus. And some may take longer than three months or more.
That said, you can make serious progress at the 30-day mark.
It starts by promptly establishing a business identity, getting an EIN, a DUNS number, and a separate bank account.
From there, opening business tradelines (especially net 30 accounts), using a business credit card, making payments early, and maintaining smart credit utilization can help you make fast progress.
Using eCredable Business Lift to report business utility and telecom payments should also improve your business credit within a month because they will attempt to download up to 24 months of your payment history to service providers.
How Can I Build Business Credit in 2 Months?
The strategy for building business credit in 60 days is the same as it is for building it within 30 days.
It’s just a matter of staying the course by partnering with vendors and suppliers that report payment history to business credit bureaus.
Use your accounts and business credit card responsibly by making prompt payments, maintaining a reasonable credit utilization ratio, and monitoring your business credit.
The longer track record you have of a good payment history, the better your business credit score will be.
Just like with a personal credit score, after two months, your business credit score will have more time to “gel” and you should be well on your way to establishing good business credit.
See Our Other Articles on Building Business Credit:
- Low Risk Industries for Business Credit
- How To Build Business Credit Without Using Personal Credit
- How Long Does it Take to Build Business Credit?
- How to Build Business Credit With Bad Personal Credit