This post was originally published on On Deck
Building your business credit can start with a few steps, like setting up your legal business entity and becoming more visible to credit reporting agencies. It also involves using financial tools like a D-U-N-S® Number, or opening a business bank account and using business credit responsibly.
Just like individuals rely on personal credit scores, businesses also have credit profiles that basically serve as your company’s financial report card to assess financial health and credibility.
Whether you manage an early-stage startup or larger corporation, it’s a good idea to learn how to establish business credit so you can navigate this important aspect of business finance.
What is business credit?
Business credit is a measure of a company’s creditworthiness and ability to meet financial obligations. Business credit reflects a business’s history of borrowing and repayment.
Similar to personal credit, consistently paying bills on time, avoiding defaults and maintaining a solid credit profile can help your business grow without relying on your personal credit history.
Having a good business credit score can also help your business secure more favorable financing options, such as lower interest rates, higher credit limits and flexible payment terms.
Credit bureaus such as Equifax, Experian, and Dun & Bradstreet
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