Business Credit Scores: What You Need to Know

For business owners, building strong business credit is a game-changer. It can help you avoid relying on personal credit, secure competitive business loans, access better insurance rates, and more. While business credit scores share similarities with personal credit scores, there are key differences every entrepreneur should understand.

This guide will walk you through the essentials of business credit scores, how they work, and why they matter. By the end, you’ll have a clearer understanding of how to establish, build, and leverage your business credit to support your company’s growth.

Why Your Business Credit Score Matters

Your business credit score is one of the most critical factors in building a successful business. It acts as a financial reputation for your company, influencing decisions lenders, insurers, and even suppliers make. A strong credit score can open doors to better funding opportunities, lower interest rates, and reduced insurance premiums, helping you grow your business while minimizing financial risks.

What Is a Business Credit Score?

In simple terms, a business credit score is like a personal credit score but tailored to your business. Just as your personal credit score provides lenders with an idea of your creditworthiness, a business credit score helps assess the financial health and reliability of your business.

Lenders use business credit scores to evaluate the risk of providing funding. Business credit reporting agencies collect information about your company’s financial history—such as payment records, outstanding debts, and credit usage—and translate it into a score. A higher score means your business is more likely to secure loans and favorable terms.

Not only does a good business credit score improve your chances of loan approvals, but it can also help lower your insurance premiums and strengthen your overall financial standing.

Key Differences Between Personal and Business Credit Scores

While personal and business credit scores share some similarities, there are notable differences:

1. Scoring Scale
   Personal credit scores range from 300 to 850, while business credit scores are typically scored on a scale of 1 to 100. A score above 75 is considered excellent for a business.
2. Tracking Information
   Your personal credit is tied to your Social Security number, but business credit is tied to your business name, address, and Employer Identification Number (EIN).
3. Public Accessibility
   Unlike personal credit, business credit scores are public information. Anyone—lenders, suppliers, or potential partners—can access your business credit score through major reporting agencies.
4. Reporting Agencies

Business credit scores are compiled by agencies like Dun & Bradstreet (D&B), Equifax, and Experian. To start building a business credit profile, companies often need to register with these agencies. For example, D&B uses a unique identifier called a D-U-N-S number, which businesses apply for to get started.

Do You Need a Business Credit Score?

Whether you’re a startup or an established business, chances are your business credit score isn’t top of mind. That’s understandable, it often doesn’t become a priority until it’s urgently needed. Many business owners don’t check their credit score or business credit reports, leaving them unaware of inaccuracies or missed opportunities.

However, building a strong business credit score comes with significant advantages:

• Access lower interest rates on business loans.
• Qualify for loans without a personal guarantee.
• Boost your business’s credibility—Investors and potential partners may request to review your credit score.

How to Build Good Business Credit

Building business credit shares similarities with personal credit, but it requires focused effort. A common misconception is thinking timely bill payments are enough to establish good credit. The truth is, some lenders don’t report to commercial credit agencies, meaning your responsible payments might not be reflected. Here’s how you can strengthen your business credit effectively:

1. Legally Register Your Business
   To build business credit, establish your business as a legal entity. Incorporate as an LLC, corporation, or partnership, and get an EIN (Employer Identification Number) from the IRS. An EIN acts like your business’s Social Security Number for tax purposes and opening accounts. Business credit agencies often use your EIN instead of your personal SSN to track credit, keeping personal and business credit separate.
2. Open a Business Credit Card and Bank Account
   Separating personal and business finances is crucial for building credit. Open a business credit card and bank account to exclusively manage business expenses like supplies, software, or travel. Keep a low credit utilization ratio (below 30%) and always pay on time to show lenders your business is dependable.
3. Work with Vendors That Report Payments
   Not all vendors report payments to credit bureaus, but working with those that do can boost your credit profile. Check if vendors report to agencies like Dun & Bradstreet, Experian, or Equifax. Consistently paying on time through these vendors can improve your credit history and diversify your credit activity.
4. Pay on Time—or Early
   Timely payments are key to building strong business credit. Late payments hurt your score and credibility with lenders. If possible, pay invoices early—credit systems like the Dun & Bradstreet PAYDEX score reward early payments, which can significantly enhance your credit score.
5. Monitor Your Credit Score
   Regularly check your business credit score with agencies like Dun & Bradstreet, Experian, and Equifax. While there may be fees for detailed reports, monitoring your score helps you catch errors or fraud early. Staying informed ensures a strong credit profile and better access to loans or credit lines.

Does Personal Credit Affect Business Credit?

While business and personal credit are tracked separately, certain business credit scores consider both. Some business credit cards and financing options also report to both personal and commercial credit databases. Understanding how these systems interact can help you make smarter financial decisions.

By taking these steps, you can establish and maintain strong business credit—an essential foundation for long-term growth and financial flexibility.