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How to establish a credit history as a new business

business credit history
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Business credit reporting can be inconsistent. Before applying, ask whether the lender will report your account to one of the business credit bureaus.

2. Apply for a business credit card

Your credit file will be thin until you open an account that gets reported to at least one of the three business credit rating agencies: D&B, Equifax, and Experian.

One way to start building your credit history is applying for a business credit card. Initially, you may only qualify for a low limit. But if you pay your bills on time, you may be eligible for a higher limit in the future.

One caveat before you apply for a business credit card: not all business credit cards report to the credit rating agencies, so ask about reporting policies before applying.

3. Open a vendor account

Another way to establish business credit is to open a small “vendor line of credit."

Many companies, including QuillUline, and Grainger, allow businesses to purchase items such as office supplies, safety equipment, coffee, and snacks on credit. You'll receive your products in the mail, along with an invoice due in 15 or 30 days. Essentially, this is a small line of credit. Once you pay your bill, the vendor will report it to the credit bureaus. Within a few months, you're on your way to building a business credit score.

4. Get credit for paying your other bills

Utilities and your cell phone bills don't typically show up on your credit report (unless your account goes into collection status). However, services like eCredable can help you build business credit with the bills you're already paying.

When you sign up for an eCredable account, you link up to eight eligible accounts, including utilities, mobile phones, and internet. The system downloads your payment history from the service provider and reports your payment history to the credit bureaus.

The fee for this service is $49.95 for the first month and $9.95 per month after that. However, it's a good alternative for business owners who want to build a business credit score without running the risk of going into debt.

5. Apply for a business line of credit

business line of credit is another option for building a business credit history. A business line of credit is like a credit card, but instead of using it to purchase goods and service, you get access to cash – usually at a lower interest rate.

You can use a line of credit to purchase inventory, cover payroll, or see you through a short-term cash shortage while waiting for clients to pay you.

Without an established business credit history, you may have trouble qualifying for a stand-alone line of credit. For that reason, it's a good idea to talk to someone at the bank where you currently maintain your business checking or any personal bank accounts.

Once you've established your business credit score, keep it healthy by paying your bills on time and using your business credit responsibly. It could be a determining factor in the long-term success of your business.

Learn more about business credit cards at Synovus

Important Disclosure Information

This content is general in nature and does not constitute legal, tax, accounting, financial or investment advice. You are encouraged to consult with competent legal, tax, accounting, financial or investment professionals based on your specific circumstances. We do not make any warranties as to accuracy or completeness of this information, do not endorse any third-party companies, products, or services described here, and take no liability for your use of this information.

  1. Michael J. McManus, “Dissecting Access to Capital," U.S. Small Business Administration, published September 2017, accessed August 8, 2019. Back
  2. Sun & Bradstreet, “D-U-N-S Number," accessed August 8, 2019. Back