How to Build Business Credit in 30 Days

Building business credit is a step-by-step process, but it’s by no means difficult or prohibitive.

If you’re looking to build credit to secure funding more easily, we’ve outlined the necessary actions you need to take to build business credit in 30 days.

7 Ways to Build Credit in 30 Days

1. Set Up Your Business Correctly

Before you can build business credit, you need to establish your small business.

There are several elements that will go into this initial step.

The simplest step is choosing your business name and determining where you wish to operate. After weighing your ideas, finalize your location and set up a new phone number.

If you have a home-based business, make sure that you have a separate business address from your home address. Some business credit scores and lenders prefer that.

Next comes choosing a business structure. There are multiple entity types to choose from, each of which offers its own unique set of advantages and disadvantages. These include:

• LLC: Aptly named, a limited liability company generally protects you from personal liability. Your personal assets are safe should you go bankrupt or be on the receiving end of a lawsuit. They also give you the ability to avoid corporate taxes.
• S-Corp: S-corporations are often the best option for those who are looking to avoid corporate tax and instead only have to pay independent income taxes. However, there are certain restrictions for these corporations that aren’t applicable to C-corporations.
• C-Corp: C-corporations, also just known as corporations, are their own legal entities that benefit from an independent lifespan separate from the owner, the ability to raise capital with greater ease, and added protections for businesses with higher risk. However, you will also have to deal with double taxation.

Finally, it’s important to apply for both state and federal licenses and permits. This will guarantee that you’re operating legally to avoid any financial or legal repercussions.

2. Obtain EIN

When you apply for a personal credit card, you’ll be asked for your SSN. The same goes for any other financial product you’re seeking to secure.

In much the same way, financial institutions you’re attempting to secure financial gains from as a business will ask for your employer identification number (EIN).

Acquiring an EIN for your small business is simple. All you have to do is visit the IRS website and fill out an application.

An EIN gives you the ability to build credit separate from your personal credit. Because your EIN is tied to your small business, those giving you access to credit tools will be specifically looking at that business credit history and your credit score when determining creditworthiness.

As a bonus tip, always aim to apply for credit with EIN only. There are many credit solutions that will use your personal credit to determine creditworthiness. They may even report to personal credit bureaus, which can be a problem for your personal credit score if you fall behind.

Always avoid using personal credit in business when you can.

You can get a business credit card with EIN only to start building business credit without touching your personal credit score.

3. Apply for a DUNS Number

Dun & Bradstreet is one of the top three business credit bureaus. They’re crucial in helping you build business credit and tap into funding. This is true whether you want a credit card or a business loan.

The next step is to apply for a DUNS Number. A DUNS number helps you establish your business with D&B. It’s also something that many companies and government agencies will ask for. This will help them see your business credit profile.

This business credit file features your business credit history, business credit score, and more.

A DUNS Number, like an EIN, is easy to apply for. You can do it on the D&B website. They also break the process down into four seamless steps.

1. Select the description that best fits your company and the reason why you’re filing for a DUNS Number.
2. Fill out the necessary information about your business.
3. Get your DUNS number for free in up to 30 days, or expedite the process for a fee.
4. Wait for someone to contact you to validate your information, or wait for your number to arrive. Then, your business credit profile will be set up.

4. Open a Business Bank Account

A business bank account is required for lenders to seriously consider your application. It’s even a credit scoring factor for some business credit scores. If you don’t have a business bank account, you can hamper your progress toward building business credit.

Opening a business bank account will require several things. These include:

• Your EIN
• Your business entity/formation documents
• Business license
• Ownership agreements
• And potentially other documents as required by your chosen bank

Opening a business bank account is a simple task. You should experience few issues so long as you’ve gathered all the necessary documentation.

Take care to do your research and look for the best business bank account. Seek out one with minimal fees and additional benefits that you can take advantage of as you continue to use that bank.

For example, you may want one that you can get a solid credit card from once you’ve built your business credit.

5. Acquire Business Tradelines

Now that you have everything in place, it’s time to work on building business credit.

The first step in any young business’s journey is applying for business tradelines.

Business tradelines are credit accounts with vendors that report on-time and early payments to credit bureaus. Unlike a business credit card or business loans, they’re much easier to acquire. Any business can build its business credit score with trade credit or vendor credit.

Many business tradelines offer different terms. For example, you’ll often encounter net 30 accounts. A net 30 account simply means that you have 30 days after the transaction to pay it back. Beyond net 30, there are also net 60 and net 90 terms.

With FairFigure, you get two business tradelines. This comes in the form of our business credit monitoring services and our FairFigure Capital Card, the latter being better than a traditional business credit card.

Ideally, you’ll want ten to get started. Finding ones that will suit your business and are easy to apply for is a simple task.

The one important note to add here is to aim for those that report to the top three business credit bureaus: D&B, Equifax, and Experian.

If they only report to one business credit bureau, they won’t be as effective in helping you build your business credit score.

The whole point here is to boost your business credit scores. Limited reporting won’t do as much for your business credit scores.

6. Pay Your Bills on Time

This might seem like a given when you’re building credit. You don’t want to be late to pay your business credit card, loans, or other revolving credit and bills. Your good credit score will naturally take a hit.

However, it’s an important reminder if you want good business credit on your business credit reports.

Your payment activity plays a critical role in your PAYDEX Score. PAYDEX, like FICO, features a credit score range. Your PAYDEX credit Score ranges anywhere from 0 to 100. Strong business credit sits at 100.

Paying your bills on time is crucial to keeping your PAYDEX Score high. If you regularly pay on time, you’ll likely have an average score of 80. This is good business credit, but you can do better.

This is where the score drifts away from how personal credit is calculated. On-time payments are good, but early payments are better for your score and business credit history.

A PAYDEX credit score of 90 indicates that you generally pay 20 days sooner than you’re required. Meanwhile, a score of 100 indicates that you’re paying 30 days sooner than the agreed-upon terms.

The earlier you pay, the more effective the impact will be on your score. If you can pay early, pay early for strong business credit. If you can’t get strong business credit, good credit will suffice for now.

However, never pay later than the due date. This will hinder your efforts to build business credit in 30 days. A good business credit score will suffer with each late payment.

7. Monitor Your Business Credit Reports

Once you start building business credit, you’ll need to keep a careful eye on your business credit reports.

Keeping an eye out for inconsistencies or mistakes in your free business credit report will help you rectify the issue quickly. This is true no matter whether you’re the only one using solutions like a business credit card or if you have employees using business credit as well.

But how can you do this? Our business credit monitoring tool is a useful resource for each credit report.

FairFigure helps you check your credit report with Dun & Bradstreet, CreditSafe, and Equifax. This gives you a comprehensive overview of your business credit health at all times.

More than that, we offer a wealth of features that will prove useful as you build credit.

This includes our fast business credit corrector, our darknet scanner that helps you identify when sensitive info is being used maliciously, and AI podcasts that deliver insights into your business spending and credit health monthly.

All these will prove useful when you gather more funding. You can only keep tabs on a credit card or a business loan when you have few to manage. Each new credit account, like a new credit card or a new business loan, will prove too much to track manually.

With FairFigure, you can monitor business credit and build business credit effectively.

Access Two Tradelines and Funding With FairFigure

FairFigure makes it easy to build business credit in 30 days without the hassle of more traditional credit solutions.

Our business credit monitoring tool serves as a vendor tradeline that helps you keep tabs on your credit, all while getting credit insights and additional support.

Meanwhile, our FairFigure Capital Card helps you access revenue-based funding while building credit as well. It’s an EIN-only card that’s accessible to any business at least three months old with $2,500 in recurring revenue.

You won’t need to deal with personal credit checks, a personal guarantee, or even paperwork.

Are you ready to build business credit fast? Register for FairFigure now to get started!