The first step in building business credit is to ensure that your business is properly set up as a legal entity. Most business owners choose one of the following structures:
By forming an LLC or corporation, you create a legal distinction between your personal and business assets, which is essential for protecting your personal credit and building business credit using your EIN.
If you haven’t already, apply for an EIN through the IRS website. The process is quick, free, and easy. Once you receive your EIN, use it on all your business documents, tax filings, and applications for credit accounts.
With your EIN in hand, the next step is to open a business bank account. This account will be critical for managing your company’s cash flow and showing lenders that your business is a legitimate operation.
Make sure to use your business bank account for all business-related transactions. Avoid mixing personal and business finances, as this can complicate your tax filings and damage your credibility when applying for credit.
To build business credit using your EIN, you need to establish a profile with business credit bureaus. The major business credit bureaus include:
Start by applying for a D-U-N-S number from Dun & Bradstreet, which is necessary to begin tracking your business credit. This number is free to obtain and acts as another identifier, similar to your EIN, for your business.
One of the easiest ways to start building business credit is by working with vendors and suppliers that report payments to business credit bureaus. Look for companies that offer net-30 or net-60 payment terms and use your EIN when applying for these accounts.
Consistently paying these accounts on time will help you build a positive credit history for your business. Make sure the vendors report your payments to the business credit bureaus—this is crucial for growing your business credit profile.
Once you have a solid foundation with vendor accounts, consider applying for a business credit card that only requires your EIN. Many lenders offer business credit cards without requiring a personal guarantee. These cards are designed to help businesses establish credit in their name.
Using a business credit card responsibly—paying your bills on time and keeping your credit utilization low—will further strengthen your business credit score.
Just like personal credit, it's important to regularly monitor your business credit reports for accuracy. You can obtain reports from Dun & Bradstreet, Experian Business, and Equifax Business.
By reviewing your reports regularly, you’ll be able to spot any errors or discrepancies and take action to resolve them. Keeping your business credit report clean and up to date is essential for maintaining a strong credit profile.
Building business credit using only your EIN has several advantages:
Building business credit with your EIN is a smart move for any business owner who wants to keep personal and business finances separate while accessing greater financial opportunities. By following these steps and maintaining a strong credit history, you’ll set your business up for long-term success and financial flexibility.
Take control of your business’s financial future today by using your EIN to start building business credit. The sooner you begin, the sooner your company will be ready to unlock larger loans, better financing options, and sustainable growth.