When you’re learning how to build business credit in the US, it might seem like yet another complicated step on your already full plate. But it doesn’t have to feel overwhelming. With the right tips and guidance, caring for the financial health of your business is easier than you might think.
At Remitly, we understand that running a small business as an immigrant means balancing a lot of expectations. We help millions of people like you safely send money around the world, and we’ve seen how good business credit can open new opportunities. In this article, we’ll walk you through simple steps to start building your business credit quickly and without impacting your personal finances.
How to build business credit in the US
Starting your own business in a new country is a journey filled with excitement, ambition, and plenty of paperwork. One step that often gets overlooked in the early days is building business credit. Having a strong credit profile can turn your idea into a steady, growing business with fewer financial roadblocks along the way.
What business credit means
Think of business credit as your company’s financial reputation. It shows how your business handles borrowing and repayment, not just with banks, but with suppliers, landlords, and even utility providers. Unlike personal credit, which is connected to your Social Security Number, business credit is usually tied to an Employer Identification Number (EIN), and sometimes a Data Universal Numbering System (DUNS) number too.
This separation is a big plus. It means that if your business hits a bump in the road, your personal credit won’t necessarily be affected. That’s especially helpful if you’re focused on building long-term financial stability for yourself and your family. And if you started your business using an Individual Taxpayer Identification Number (ITIN), don’t worry, you can still move over to an EIN once you have one and begin strengthening your business credit profile.
Why strong business credit makes a difference
A healthy credit score can open doors to financing with better terms, including lower interest rates, higher credit limits, and more flexible payment options from vendors. Those extra 30 or 60 days to pay bills can give your business valuable breathing room, especially during busy periods or while you’re waiting on customer payments.
But the benefits go beyond loans. Good business credit can mean lower insurance costs, waived deposits on utilities, and easier access to supplies on credit. All of these can ease cash flow and free up money to invest in your business. Over time, a strong credit profile can also boost your business’s value, which matters if you ever want to bring on investors or sell the company.
Establishing the foundation to build business credit
Getting your business ready to build credit starts with setting up a strong foundation. One of the most important things you can do early on is separate your personal finances from your business.
Registering your business and getting an EIN
First, you’ll need to decide on a legal structure for your business. This could be a sole proprietorship, partnership, LLC, or corporation. Many small business owners choose an LLC because it offers some protection for their personal assets without too much complicated paperwork.
Once you’ve made your choice, you’ll need to register your business with your state. Be sure to keep copies of the documents somewhere safe in case you need them later.
After that, it’s time to apply for an Employer Identification Number (EIN) from the IRS. This is a nine-digit number that works like a Social Security Number, but for your business. It’s free and shows other important entities—like credit bureaus, suppliers, and lenders—that you’re running a real business.
If you’re still waiting on certain documents, like a Social Security number, don’t worry. You can still apply for an EIN by mailing or faxing Form SS-4 to the IRS. It might take a bit longer, but it’s an important step toward opening business accounts and building credit.
Opening a business bank account
Once your business is officially registered, open a separate bank account just for your business. This account should be where all your business income goes and where you pay for expenses like rent, supplies, or software.
Keeping your business finances in one place helps with bookkeeping, makes tax time much easier, and shows lenders that your business is active and well-managed. It will also give lenders a clear picture of your company’s cash flow, something they look at closely when deciding whether to approve a loan or raise your credit limit.
If you’re new to the US banking system, there are banks and credit unions that offer support in different languages and have lower fees, which can be helpful as you get started.
Steps to start building business credit
Building business credit takes time, but every step, no matter how small, can help you move forward. Regular purchases, on-time payments, and mindful use of credit can slowly build trust with lenders and credit bureaus.
Start with a business credit card for everyday expenses
A business credit card is a helpful tool for tracking your spending and building credit. Look for a card that reports to at least one of the major business credit bureaus, such as Dun & Bradstreet, Experian Business, or Equifax Small Business.
Use the card for day-to-day purchases and try to pay the full balance every month. If that’s not possible, keeping your balance low (below 30% of your credit limit) can still make a positive impact.
If your personal credit is in good shape, you might qualify for an unsecured business card right away. If not, a secured card is a solid starting point. These cards require a deposit that usually becomes your credit limit.
After a few months of on-time payments, many issuers will return your deposit and upgrade your card. As your credit limit increases, your business credit score can improve, especially if you’re using your card wisely and making payments on time.
Register with business credit bureaus
To build a credit profile, credit bureaus first need to know your business exists. Dun & Bradstreet offers a free DUNS number, which is needed before they can generate a PAYDEX score.
For Experian and Equifax, business credit files are usually created automatically once lenders or vendors begin reporting activity. Still, it’s worth checking that your business information is accurate, especially details like your business name, phone number, address, and industry classification. Mistakes in your file can lead to confusion or delays when applying for financing.
Why on-time payments and low balances matter
When it comes to building strong business credit, your payment history is one of the most important factors. Even one late payment can have a noticeable effect on your score. Setting reminders, using a calendar, or turning on auto-pay for recurring bills can help you stay on track.
Some vendors don’t report to credit bureaus automatically, but if you ask, they might. Office supply companies and wholesalers, especially those offering net 30 terms, are often willing to help.
Credit utilization also plays a key role. Lenders like to see that you’re not depending on credit just to stay afloat. Keeping your balances low compared to your limits shows financial stability. For bigger purchases, you might consider splitting the cost between cards or paying early to keep your statement balance lower.
Getting the most out of your business credit
Once your credit starts to grow, it becomes a useful tool for reaching your goals. Higher limits and better scores can make it easier to manage cash flow, invest in equipment, or take the next step in growing your business.
How to boost your business credit limit
After about six months of on-time payments, you may be eligible for a credit limit increase. You can call your credit card provider and ask, just be ready to share recent income statements or tax documents to support your request. If your spending stays steady, a higher limit can actually improve your credit score by lowering your overall usage.
You can also explore different types of credit. For example, getting both a credit card and a small business loan shows that you can manage more than one kind of financial responsibility. And if you have good relationships with suppliers, consider asking for a larger credit line after a history of reliable payments. They often appreciate consistency and may be willing to extend more favorable terms.
Tips for improving your business credit score
- Add trade lines: If you work with suppliers who offer net 30 or net 60 terms, ask if they can report your payment history. Even one reported vendor can help strengthen your profile.
- Keep balances low: Try to keep your credit card use under 30% of your limit. If you need to make a big purchase, paying it off quickly can help keep your average usage down.
- Limit new applications: It’s best to apply for credit only when necessary. Too many inquiries in a short period can make lenders nervous.
- Fix errors: It’s not uncommon for reports to have mistakes. If you see anything off, like an outdated address or a payment marked late, submit a correction.
- Connect with local lenders: Community banks, credit unions, or micro lenders often take a more personal approach. A good relationship might help if your credit history is still growing.
Check your business credit reports regularly
It’s a good idea to review your credit reports every few months to make sure everything looks right. Dun & Bradstreet offers a free tool called CreditSignal where you can track changes to your PAYDEX score, and Experian offers basic scores for a small fee. Regular check-ins help you catch any errors or unusual activity early on.
If you find something that doesn’t look right, like a missed payment that you know was made on time, you can usually fix it by submitting a copy of the payment confirmation or a bank statement through the credit bureau’s online portal. Correcting even one mistake in your business credit reports can give your score a helpful boost and may lead to better loan terms in the future.
How personal and business credit are connected
When you’re just starting out, your personal and business credit can often overlap. That’s totally normal, especially for new small businesses. But understanding how they’re connected can help you stay financially healthy and give lenders more confidence when you apply for credit.
Why your personal credit matters in the early stages
In the early years of your business, many lenders and credit card companies may ask for a personal guarantee. That means they’ll look at your personal credit score to help them decide whether or not to approve your application. A solid record of on-time payments, low balances, and responsible borrowing can make it easier to qualify and may even help you get better interest rates.
If your personal credit needs a bit of work, try to avoid applying for too much credit at once. Too many applications can cause temporary dips in your score, so spacing them out can make a difference, especially if you’re working to build both personal and business credit at the same time.
Using personal credit to give your business credit a head start
If your personal credit is in good shape, it can actually help you get your business credit started. You can open accounts that allow a personal guarantee, use them responsibly, and begin building a separate credit history for your business.
After a year or two of steady, on-time payments, you may be able to switch to credit products that rely only on your business’s credit—no personal guarantee required.
As you grow, it’s important to keep your personal and business finances clearly separate. Using different credit cards, one for home expenses and one for business, can make things much easier when it’s time to organize your taxes or apply for a loan. If your business is registered as an LLC or corporation, this separation also helps protect your personal assets if any legal issues arise.
FAQs
What’s the first step to building business credit in the US?
Start by registering your business, getting an EIN, and opening a business bank account. These steps help show that your business is a separate, official entity.
How can I build business credit faster?
Use a business credit card, pay every bill on time, and ask vendors to report your payment history. Keeping your balances low also helps your score grow steadily.
Can I build business credit if I’m new to the US?
Yes. Even if you’re starting with an ITIN, you can still apply for an EIN and begin building business credit once your business is registered.
How does an LLC get a business credit card?
Once your LLC has an EIN, you can apply for a business credit card. If your business is new, you may need to use your personal credit as a guarantee at first.
How long does it take to build business credit?
You might see early improvements in about six months with regular payments and low credit use. Building a strong, independent credit profile can take one to two years. Remember to check your business reports every few months to spot errors or fraud and make sure your credit activity is being reported correctly.