How Business Credit Scores Work
Unlike personal credit (where FICO dominates), business credit is tracked across three separate bureaus — each with its own scoring model. Understanding which score matters to which lender is critical.
| Bureau | Score Name | Scale | Good Score | What Drives It |
|---|---|---|---|---|
| Dun & Bradstreet | PAYDEX | 0–100 | 80+ | Payment timing vs. due date (early = higher) |
| Experian Business | Intelliscore Plus | 0–100 | 76+ | Payment history, utilization, derogatory marks |
| Equifax Business | Business Credit Risk Score | 101–992 | 556+ | Payment history, length of credit, public records |
The PAYDEX Score Explained
The D&B PAYDEX is the most widely referenced business credit score for vendor trade lines. Key characteristics:
- 100: All payments made 30+ days early
- 80: All payments made on the due date
- 70: Payments average 15 days late
- 50: Payments average 30 days late
- Below 50: Significant late payment history
Most vendors and lenders want a PAYDEX of 75+. Paying early (not just on time) is the single most impactful way to push your PAYDEX toward 80–100.
12 Steps to Improve Your Business Credit Score
1
Incorporate Your Business (LLC or Corp)
A sole proprietorship uses your Social Security Number — not an EIN — and its credit is not separated from your personal credit. Incorporating creates a legally separate entity that can build its own credit history. An LLC or S-Corp formation typically costs $50–$500 depending on state.
Time: 1–5 days · Cost: $50–$500
2
Get an EIN (Employer Identification Number)
Apply free at IRS.gov — the EIN is your business's tax ID number, equivalent to a Social Security Number for your company. You need an EIN to open a business bank account, apply for credit, and register with Dun & Bradstreet. Takes 5 minutes online.
Time: 5 minutes · Cost: Free
3
Open a Dedicated Business Bank Account
Never mix personal and business finances. A dedicated business checking account is required by lenders and demonstrates business legitimacy. It's also the foundation for revenue verification when applying for MCA or term loans. Use the same address across all accounts, registrations, and filings.
Time: 1 day · Cost: Free–$25/month
4
Register for a DUNS Number (Dun & Bradstreet)
A DUNS number is required to build a PAYDEX score. Register free at dnb.com. D&B will assign your DUNS number within 1–30 days (expedited options exist). Make sure your business address, phone number, and entity name match exactly across all registrations — inconsistencies reduce your credibility score.
Time: 1–30 days · Cost: Free
5
Set Up a Business Phone and Address
Business credit bureaus and lenders verify your business legitimacy through consistent contact information. You need: a dedicated business phone number (not a personal cell), a physical or virtual business address (not a residential P.O. Box), and a professional website. Inconsistencies across listings trigger risk flags.
Time: 1–3 days · Cost: $20–$100/month
6
Open Net-30 Vendor Accounts That Report to D&B
Starter vendor credit accounts are the fastest way to build a PAYDEX score. These vendors extend net-30 terms (you buy on credit, pay within 30 days) and report your payment history to D&B and Experian Business. Key starters: Uline (office/shipping supplies), Quill (office supplies, reports to D&B), Grainger (industrial supply), Crown Office Supplies, and Wise Business Plans.
Time: 1–2 weeks to open · 30–90 days to reflect on score
7
PAY ALL ACCOUNTS EARLY — Not Just On Time
The PAYDEX score specifically rewards early payment. Paying on the due date earns an 80. Paying 30+ days early earns higher scores (toward 100). Make it a habit to pay net-30 accounts within 10–15 days of the invoice. This is the single most impactful action for rapidly improving your PAYDEX score above 80.
Impact: Highest · Ongoing habit
8
Apply for a Business Credit Card
Business credit cards report to Experian Business and Equifax Business. Choose one with a low spending limit initially and pay in full every month. Avoid applying for multiple cards at once. Good starter business cards include Chase Ink Business Cash, American Express Blue Business Cash, and Capital One Spark. Requires personal credit check (typically 650+ personal FICO).
Time: 5–10 minutes to apply · Reporting in 30–60 days
9
Keep Business Credit Utilization Below 30%
Just like personal credit, business credit utilization (balance ÷ credit limit) affects your Experian Business and Equifax scores. Keep total business credit card balances below 30% of your total credit limit — below 10% is ideal. High utilization signals risk even if you pay on time.
Impact: Moderate to High · Ongoing discipline
10
Add More Trade Lines Over Time
PAYDEX requires a minimum of 3 trade references that report to D&B to generate a score. Aim for 5–10+ net-30 accounts across multiple suppliers. The more positive trade lines, the more data points supporting your score. Diversify: mix product vendors, software subscriptions, and service providers where possible.
Timeline: 6–12 months to build diversified trade line profile
11
Dispute Errors on Your Business Credit Reports
Request your business credit reports from D&B, Experian Business, and Equifax Business. Errors are common — wrong payment history, outdated information, or misattributed accounts. Dispute errors directly through each bureau's dispute process. One corrected late-payment error can jump your PAYDEX significantly.
Time: 2–4 weeks per dispute · Cost: Report may cost $39–$99
12
Monitor Your Business Credit Monthly
Business credit reports are not frozen like personal credit — they can change monthly. Use D&B's CreditMonitor, Experian Business Credit Advantage, or Nav (free tier available) to track your scores and get alerts when they change. Early detection of errors or fraudulent accounts is critical.
Cost: Free (Nav) to $199/month (D&B CreditMonitor)
Timeline: Zero to 80 PAYDEX
Realistic Business Credit Building Timeline
Week 1–2
Form LLC, get EIN, open business bank account, register DUNS number, set up business phone/address
Week 2–4
Open 3–5 net-30 vendor accounts (Uline, Quill, Grainger, Crown Office). Make first purchases.
Month 1–2
Pay all net-30 accounts 10–15 days early. Apply for business credit card.
Month 3
D&B PAYDEX score generates (needs 3+ trade references). Initial score typically 70–80 with early payment.
Month 3–6
Continue paying early, add 2–3 more trade lines. PAYDEX consolidates at 75–80+. Experian Business score generates.
Month 6–12
Strong payment history established. Now eligible for business lines of credit, lower-rate term loans, better vendor terms.
Year 2+
Full business credit profile — SBA loan eligibility, premium credit cards, supplier net-60 terms, lower MCA rates.
Starter Vendor Accounts That Report to Business Credit Bureaus
Uline
Shipping, packaging, industrial supplies
Reports to D&B
Quill (Staples)
Office supplies, tech accessories
Reports to D&B
Grainger
Industrial, safety, MRO supplies
Reports to D&B
Crown Office Supplies
Office supplies — credit-friendly for new businesses
Reports to D&B + Experian
Wise Business Plans
Business planning, printing services
Reports to D&B
Summa Office Supplies
Office supplies — easy net-30 approval
Reports to D&B + Experian
Get Funding Now, While Your Credit Builds
Building business credit takes 3–12 months. You don't have to wait to access capital. Merchant cash advances from T.A.G. are based on your personal credit (500+) and business revenue — not your business credit score — so you can fund operations now while building the credit profile that unlocks lower-cost options later.
| Funding Option | Min Business Credit | Min Personal Credit | Speed |
|---|---|---|---|
| Merchant Cash Advance (T.A.G.) | None required | 500+ FICO | 24–72 hours |
| Invoice Factoring | None required | None (based on your customers) | 24–48 hours |
| Equipment Financing | None required | 550+ FICO | 2–5 days |
| Business Credit Card | Good helps | 650+ FICO | Instant (if approved) |
| Business Line of Credit (online) | Good helps | 600+ FICO | 1–7 days |
| SBA 7(a) Loan | 75+ PAYDEX preferred | 650+ FICO | 30–90 days |
| Bank Term Loan | 75+ PAYDEX required | 680+ FICO | 30–60 days |
Frequently Asked Questions
- How do I build business credit fast?
- To build business credit fast: (1) Form an LLC and get an EIN; (2) Open a business bank account; (3) Register for a DUNS number (free at dnb.com); (4) Open 3–5 net-30 vendor accounts that report to D&B (Uline, Quill, Grainger); (5) Pay all accounts 10–15 days early — PAYDEX rewards early payment; (6) Apply for a business credit card. You can reach PAYDEX 80 within 3–6 months with this approach.
- What is a good business credit score?
- Good business credit scores: D&B PAYDEX 80+ (75+ is minimum for most lenders), Experian Business 76+ (Intelliscore Plus), Equifax Business 556+ (Business Credit Risk Score). For most lenders, PAYDEX is the primary business credit metric. Alternative lenders (MCA, equipment financing, invoice factoring) generally do not require any minimum business credit score — they underwrite on personal credit and revenue instead.
- Does a merchant cash advance build business credit?
- No — most MCA providers do not report repayment history to business credit bureaus (D&B, Experian Business, Equifax Business). MCAs generally don't appear on business credit reports at all, so they neither help nor hurt your business credit score. To build business credit, use net-30 vendor accounts, business credit cards, and bank/SBA loans that report to business credit bureaus.
- What is a DUNS number and do I need one?
- A DUNS number is a unique 9-digit business identifier from Dun & Bradstreet. It's the foundation for your PAYDEX score — without one, D&B cannot track your payment history. Get one free at dnb.com. Required for: building D&B credit, federal government contracts, opening vendor trade lines that report to D&B. Registration takes 1–30 days (expedited options available).
- Can I get business funding with bad business credit?
- Yes — alternative lenders like T.A.G. focus on personal credit (500+ FICO) and business revenue, not your business credit score. A merchant cash advance, invoice factoring, and equipment financing are all available with no minimum business credit score. As your business credit builds over 6–12 months, you'll qualify for lower-cost products: business lines of credit, SBA loans, and bank term loans.