How to Build Business Credit Without Using Personal Credit

Many small business owners use their personal credit to start or help run their businesses. However, if you can establish and build your business credit, you may be able to use it instead.


Solely using your business credit can keep your business activity from impacting your personal credit. This may help you qualify for more favorable terms when you need a personal credit card or loan. Separating business and personal finances can also help limit your personal liability. 

What to Avoid When You Get Started

If you’re just getting started, here are a few things you want to avoid:

  • Remaining a sole proprietor. A sole proprietorship—the default business type if you’re a contractor—doesn’t create a legal separation between the business owner and the business. While you may be able to build business credit with a sole proprietorship, you will still remain personally liable for the debt. 
  • Sharing financial accounts. Keeping your business and personal finances separate is  important for establishing good business credit and protecting your personal assets. Plus, it can make preparing your tax returns easier. 
  • Agreeing to personal credit checks. When a creditor checks your personal credit reports, that can impact your personal credit. If the creditor also reports the account to the major consumer credit bureaus under your name, that will continue to impact your credit. 

Creditors will often require the personal information of anyone who owns a large stake in the business, such as their name, date of birth, and Social Security number (SSN), but this doesn’t necessarily mean the account will impact your personal credit.

A Consumer Financial Protection Bureau (CFPB) report from June 2021 found that some commercial lenders only report certain types of accounts or delinquent payments. As a result, on-time business payments might not help your personal credit, but missing payments might hurt it. 

If you’re applying for a business loan or line of credit and need to share your personal information, you may want to ask if the lender reports to the consumer credit bureaus. 

Follow these 10 steps to help your business qualify for financing without using your personal credit. 

1. Pick a Business Name and Contact Information 

You may already have a few names picked out for your business, but you may want to check a few things before making it official:

  • Is the website available?
  • Are social media handles available?
  • Has someone else trademarked the name?
  • Is it available, and will your state accept the name?
  • Will the name make sense as your business expands?

If the name you chose passes all these tests, you can use the name to form or register your new business entity. (You may want to grab the website and social media handles right away.)

You may need an address and phone number when you go to create the business. This may be the primary way the state contacts you, so you could start with your home address and number. However, they may also become public record.

To protect their information, some people use a virtual mailbox at a nearby mail center. Or, in some states, you can hire a registering agent and use their address to accept the business documents. UPS offers a service that provides a physical address for your business if you don’t want to use your home address. 

If you don’t want to use your private phone number, an inexpensive option is to sign up for a voice-over-Internet Protocol (VoIP) service. A dedicated business number can be important, even if it’s forwarded to your private line. 

You can list the business address and phone number with directories and services, including 411, Better Business Bureau, Apple Maps, Google, Facebook, and Yelp. Some creditors and business credit bureaus may use these sites to verify your business’s authenticity. 

2. Form a Business Entity

Creating a legal business entity is an important step in separating your personal and business finances. You may be able to choose from different types of business entities, such as a limited liability company (LLC), limited liability partnership (LLP), or corporation. 

Your state may have specific laws that limit your options. There can also be important legal and tax implications to the decisions. You may want to hire an accountant and attorney who have experience with businesses in your state and industry before choosing the type of entity. 

3. Obtain a Federal Employer Identification Number (EIN)

As legal entities, businesses use a federal Employer Identification Number (EIN) to file their tax returns. The EIN can also be an identifier for business credit bureaus, similar to how consumer credit bureaus can use your SSN to help identify your accounts. 

You can apply for an EIN online for free. It may be possible to apply before forming a business entity. However, it might be best to form the business first, just in case the state rejects your business application. 

In addition to getting an EIN from the IRS, your business may need a state tax identification number. And, depending on your industry and location, licenses, and permits. 

4. Use Your Business to Open a Business Bank Account

Once you have your business entity and EIN, you can open a business bank account. The account will be in your company’s name, and all your business income and expenses should flow through the account. 

While a business bank account won’t help you establish business credit, it can help you keep your business and personal finances separate. 

Business lenders may also require you to have a business bank account to get a loan or line of credit. In turn, these commercial credit accounts can impact your business credit profile. 

5. Get a Free DUNS Number

Dun & Bradstreet (D&B), a major international business credit bureau, has its own identification number that it assigns to businesses. You can request a DUNS number for free online. There are also paid options if you want to expedite the process. 

Your DUNS number is unique to your business. In addition to being part of your D&B business credit report, you may need a DUNS number to qualify for certain federal government contracts and grants. 

6. Request Trade Credit From Vendors and Suppliers 

Once you’ve got your business set up, you can apply for trade credit accounts with vendors and suppliers. For example, with a net-30 account, you’ll have 30 days to pay an invoice when you order products or services.

Trade credit accounts are a type of interest-free, short-term loan. It can be especially helpful for businesses that don’t have a lot of cash on hand, or that are growing quickly. Businesses that sell to other businesses can also benefit if they regularly have to wait for payments. 

Net-terms accounts (some are longer or shorter than 30 days) are a type of vendor credit. They may be reported as vendor tradelines to business credit bureaus. We’ve compiled a list of easy-approval net-30 accounts that may be good fits for new businesses.

Once you’ve established your business credit, you may also qualify for longer terms or for term accounts with more businesses. You can continue to use these to smooth your business’ cash flow. 

7. Apply for a Credit Strong Business Account

While trade credit accounts can help your business get vendor tradelines, to get business financing it’s important to establish business financial tradelines. These can include loans, lines of credit, business credit cards, and leases. 

A Credit Strong Business credit builder account isa good way to establish a financial tradeline without using your personal credit. Your business needs to be at least three months old and have an EIN, but there’s no credit score requirement.

The account is a secured installment loan, and the loan funds are put into a business savings account and locked to secure the loan. You’ll receive the funds once you pay off the loan. But you can also pay off or cancel the credit-builder loan at any time without paying a penalty or fee.

Credit Strong reports your loan payments to the Equifax and PayNet business credit bureaus. They’ll soon be reported to Experian Business and the Small Business Financial Exchange as well.

Here are the Credit Strong Business account plans and pricing.

8. Don’t Miss Payments 

As with your personal credit, business credit files can contain positive and negative information. 

Making on-time payments can help you establish a positive payment history. Late payments can hurt your business credit scores and may stay in your business credit history for years. 

Unlike your personal credit scores, some business credit scores—such as the D&B Paydex score—also consider whether you paid your vendor credit accounts early. You can get an 80 out of 100 Paydex score by paying on time. But you have to pay early to get a higher score. 

9. Use Your Business Credit Accounts

Consistent use of your business credit accounts can also be important. After all, you want to show future vendors, creditors, and business partners that your business can manage credit accounts.

The monthly payments on a business loan, line of credit, or Credit Strong account can show consistent use in your financial tradelines. Regularly ordering goods and supplies with trade credit can keep your vendor tradelines active. 

Using these accounts can also help smooth your business’ cash flow, helping you avoid a cash crunch that leads to taking on debt or missing out on opportunities. 

10. Look for Changes in Your Business Credit Reports and Score 

Keeping an eye on your business’ credit reports and scores allows you to monitor your progress as you build business credit. It can also help you quickly detect fraudulent activity, such as someone taking out a loan in your business’ name. 

However, unlike with your personal credit, you can’t necessarily check your business credit reports for free.

There are a few services that can help, though. D&B has a free CreditSignal tool that can notify you if it detects changes in certain D&B business credit scores. If you have a Credit Strong business account, you can track your Equifax Business Delinquency Financial Score Grade for free with monthly updates. 

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