Does a business have its own credit score? (2024)

Does a business have its own credit score?

A business credit score is like your personal credit score, only it applies to the financial health of your businesses. Business credit scores help separate your personal and business finances, lower insurance rates and make business financing more accessible.

Businesses don't have one credit score — they have several. Each of the three major bureaus calculates and issues unique business credit scores based on their own criteria and algorithms. The basic score for all three is 0 – 100.

Your business profile is separate from your personal credit history. There are credit reporting services that only deal with businesses, with Dun & Bradstreet being the largest and best known. If you have more than one business, you can have a separate report for each, as long as it has its own EIN.

Yes, your LLC can have a credit score, often referred to as a business credit score or a business credit rating. Business credit scores are separate from personal credit scores and are specific to the financial activity of the LLC. These scores are typically maintained by business credit bureaus.

A good credit score for an LLC is typically considered to be in the range of 600–800, similar to your personal credit score. The higher your score, the better it looks to potential lenders and vendors who might want to do business with you.

While your personal credit score is tied to your Social Security number, your business credit score is tied to an Employer Identification Number — or EIN. This helps you keep your personal financial information private while you build and maintain your business credit score.

To keep your business and personal finances separate, you may not want to apply for a business credit card with your personal SSN. Depending on the size of your business, you may be able to apply for a business credit card using your EIN only, though opportunities are rare and may be difficult to qualify for.

However, over time, your LLC can build its own credit which will allow you to take out loans or credit cards in the name of your business. In fact, establishing credit for your LLC is an important step in running and maintaining a successful business.

Corporate credit is credit which attaches to a corporation's EIN rather than the Social Security number for any of its owners. And it is independent of any owner's personal credit score.

Business credit scores range from zero to 100 and most small business lending companies require a minimum business credit score of 75.

How do I find out my business credit score?

Free options to check your business credit score include: Dun & Bradstreet CreditSignal. This free service from Dun & Bradstreet allows you access to your business credit score, with notifications when your credit score changes and how to improve it.

It can take a new business up to three years to build a strong credit score. If you're just getting started, it's important to know that companies with an established history of timely payments and responsible financial management may be able to develop their credit faster than those with no history.

If your LLC has debts taken out in the company's name, only the LLC's business credit report will be impacted by whether you repay your debts on time. An LLC loan will only impact your personal credit if you cosign or guarantee it. If you don't do so, your personal credit report will remain unaffected.

The fastest way to build business credit for an LLC is to open a business credit card and make consistent, on-time payments. Additionally, establishing trade credit lines with vendors and suppliers who report to business credit bureaus can help build credit quickly.

While you may think credit scores are reserved for individuals, businesses also receive that important number. Similar to personal credit scores, business credit scores play a part in how lenders judge your business's eligibility for credit products, such as business loans and small business credit cards.

Yes, a newly formed LLC can get a credit card, though approval often depends on the business owner's personal credit score, as many business cards require a personal guarantee.

It can take three or more years to build a strong credit history for your business. However, there are steps you can take to start immediately, and you may qualify for some business credit opportunities after just one year.

Though you don't need a high credit score to open a business bank account, poor credit history and a track record of negative banking activity could limit your options. If you're concerned about being turned down for a business bank account, shop around for a bank or credit union that doesn't use ChexSystems.

While it's certainly possible to get a business loan with only an EIN, keep in mind that lenders use things like personal information, personal guarantees, and collateral to help protect themselves from lending to subprime borrowers.

Yes, it is possible to buy a car with an EIN number, you just need to be sure to clarify with the sales team that this is your intention. When buying the car, make it clear that it's a business purchase of the vehicle, not a personal one as this impacts which credit application you'll have to fill out.

How do I build business credit with my EIN number?

Even if your business doesn't have any revenue yet, you may still be able to get a business credit card. You'll likely need to sign a personal guarantee that you will personally pay back the balance if your business cannot.

When you form an LLC and obtain an Employer Identification Number (EIN) from the IRS, you create a unique identifier for your business. This EIN allows your LLC to open bank accounts, apply for loans, and build credit in its own name. An LLC starts with no credit score.

You have a personal credit score that's tied to your identity, primarily through your Social Security Number (SSN). If your business has a separate “Employer Identification Number” (EIN) or “Tax Identification Number” (TIN), then your business will have its own credit score associated with that number.

Visit the chosen credit bureau's website and sign up for an account. You may need to provide some basic business information, such as your company's name, address, and EIN. Each credit bureau offers different plans and report options.