Establishing business credit is an important step for any new small business. It helps you to (1) maintain a credit history separate from your personal credit history, (2) experience the business benefits of having good business credit, and (3) demonstrate separation between owners and the business.

Establishing business credit isn’t complicated, but it does take some planning and forethought. The sooner you start, the sooner your credit will start to build.

This article will walk you through steps you can take to establish your business credit so that if and when you’re ready for financing, your business is well-positioned to not only get approved for a business loan, but also get great terms on it.

• How Can I Build my Credit Fast?
• How Long Does it Take to Build Business Credit?
• How do You Start a Business Credit?
• How do I Build up my Business Credit?
• How to Build Business Credit Without Using Personal Credit?
• How to Build Business Credit in Canada
• How to Build Business Credit as a Sole Proprietorship?
• Business Credit Score
• Experian Business Credit
• Business Credit Builder
• How to Get Business Credit Card
• Business Credit Line
• Uline Business Credit
• Can I Use my EIN to Apply For Credit?
• Can Self Lender Build Business Credit?
• What is The Easiest Business Credit Card to Get?

How Can I Build my Credit Fast?

If you’re starting to build your credit from scratch, expect to wait six months before you have a credit score. The credit scoring algorithm needs you to have at least one account active for three to six months before it can generate a credit score for you.

1. Become an Authorized User

Being an authorized user means you can use another person’s credit card, but don’t have the responsibility of making payments. Once you’re an authorized user, the entire account history may be added to your credit report and factored into your credit score.

Read Also: What is Business Intelligence?

If you’re added to someone’s credit card, it should ideally be a friend or family member’s account with a low balance and no history of late payments. If you become an authorized user on an account with a negative credit history, it could actually be harmful to your own credit report.

2. Get a Secured Credit Card

A secured credit card is easier to get approved for than an unsecured card. You can control the credit limit on a secured credit card by paying a higher security deposit. Being responsible with bigger credit limits will help boost your credit score, allowing you to qualify for unsecured credit cards with higher credit limits.

Make sure the secured card you choose reports your activity to all three major credit reporting bureaus.

3. Pay on Time

Once you have accounts of your own, paying on time is the best thing you can do to build a good credit score. Payment history is the biggest factor influencing your credit score. The more on-time payments you have, the better.

You only need to make the minimum payment by the due date each month for your payment to be considered on time, so aim to pay at least the minimum. Just make sure to send it in so it arrives on time.

4. Keep Your Credit Card Balances Low

The second biggest factor that affects your credit score is the amount of debt you’re carrying. Keeping your credit card balance under 30% of the credit limit is ideal for building credit.

5. Correct Errors on Your Report

Any negative information on your credit report can make it harder to build your credit. For example, old debt collections or other unpaid bills can hurt your score, so it’s best to take care of these before you start trying to improve your credit score.

In addition to negative information that’s accurate (in other words, you really did neglect to pay those bills), there may be inaccurate information that’s also harming your score.

To find out whether errors or inaccurate information is harming your credit score, order a copy of your report from each credit bureau. You can do this for free through AnnualCreditReport.com. Then, carefully check each report for errors.

You have the right to an accurate credit report, and this right allows you to dispute errors with the credit bureaus. If you spot errors, write to the credit bureaus asking them to remove the inaccurate items from your credit report. If you have proof of the error, send a copy to help support your claim (but keep the original for your records).

6. Open a New Account

After you’ve established your credit history with one account, it can help to open another, if you’re ready. Having another account will increase your available credit if you work hard to keep your utilization low. Just as with your other accounts, it’s best to not charge more than you can afford, make timely payments, and always pay at least the minimum amount due.

But take care. While you’re working to build your credit as quickly, you want to avoid mistakes that could backfire. Opening too many credit cards in a short amount of time can hurt your credit score in the short term. Not only that, taking on more credit cards than you can handle puts you at risk of late payments, a move that will hurt your credit score.

How Long Does it Take to Build Business Credit?

Most business owners don’t like to hear this, but when it comes to building business credit, slow and steady wins the race.

Nat Wasserstein, principal of Hudson Premier Payments, a payments processor, in Nyack, N.Y., estimates that it takes three years or more to build business credit.

“Usually, credit applications say they want you in existence for at least three years,” says Wasserstein.

In some cases, creditors may require just one year, he says, but that isn’t the norm.

“They want to see you’ve been around,” says Wasserstein. “Once you have that, they want to see that there isn’t anything outstanding. There are no judgments. They need to have enough time to determine whether they want to extend credit to that company.”

How do You Start a Business Credit?

Your business credit profile is based on your track record of handling your business finances, such as your business checking account, any credit accounts you open with merchants such as office supply stores or hardware stores and any business credit cards you open – as well as any loans you take out.

1. Incorporate your business

Even though you may be incorporated when you’re reading this, it deserves a mention. With sole proprietorships and general partnerships, the business is legally the same as the owner. Therefore, there can be no separation of business credit history from personal. Incorporating a business or forming an LLC creates a business that is legally separate from the owner(s).

2. Obtain an EIN

An EIN (federal tax identification number) is basically a social security number for a business. It is required on federal tax filings and is also required to open a business bank account in the name of the corporation or LLC. In order to comply with IRS requirements, many larger businesses also require an EIN from their vendors in order to pay them for services provided.

3. Open a business bank account

Open a business checking account in the legal business name. Once open, be sure to pay the financial transactions of the business from that account. If you use a business credit card (see below) for many financial transactions, be sure to pay the credit card bill from your business checking account.

4. Establish a business phone number

Whether you use a landline, cell phone, or you use VoIP, have a separate number for your business and in your business’ legal name. List that number in the directory so it can be found.

5. Open a business credit file

Open a business credit file with all three business reporting agencies: Experian, Equifax, and TransUnion.

6. Obtain business credit card(s)

Obtain at least one business credit card that is not linked to you or any other owners personally. Pick a business credit card from a company that reports to the credit reporting agencies.

7. Establish a line of credit with vendors or suppliers

Work with multiple vendors/or suppliers (at least five for example) to create credit for your company to use when purchasing with them. Ask them to report your payment history to the credit reporting agencies.

8. Pay your bills on time

Perhaps it should go unsaid, but be sure to pay your bills on time. Like with your personal credit, late payments will negatively impact your business credit.

How do I Build up my Business Credit?

To keep your business and personal finances separate, the first step is to start building credit in your company’s name. If you want to build business credit quickly here are five simple steps.

Step 1 – Choose the Right Business Structure

To make your business a distinct legal entity requires that you select a business structure such as an LLC, LLP or corporation. Remember, sole proprietorships do not create a separate business entity.

Once you form your business entity, the next step is to register your business. This particular step is dependent on your structure and where your business is located.

Step 2 – Obtain a Federal Tax ID Number (EIN)

You can apply for a federal tax ID for free using the IRS assistance tool. This is a nine-digit number assigned to your company which you will use for things such as filing company tax returns, opening a business bank account, applying for licenses and permits, and applying for business credit.

Step 3 – Open a Business Bank Account

Once you have your federal tax ID, you’ll want to open a business bank account for your company. This is a mandatory step in creating a clear separation between your business and personal expenses.

Your banking relationships play an important role in your company’s funding potential. Not only does your business bank account serve as a bank reference on credit applications, it also allows provides key data that lenders use during a funding review.

Step 4 – Establish Credit with Vendors/Suppliers Who Report

One of the easiest ways to build business credit is to apply for net terms with vendors and suppliers. As you buy supplies, inventory, or other materials on credit, those purchases and payments get reported to business credit reporting agencies.

This activity creates your company’s credit profile and business credit report. After your company has several trade lines reporting, a business credit rating (score) is generated.

Remember, it’s important to select vendors and suppliers that report to a business credit reporting agency. Each relationship you have also serves as a trade reference that can be used on future credit applications as well.

Step 5 – Monitor Your Business Credit Reports

There are three major business credit reporting agencies so it’s important to monitor each of your company credit files. Each agency collects data from various sources and may have different information about your company.

The good news is each of the business credit agencies provide a way for you to update basic information about your business. If you uncover any outdated or incorrect information, you’ll want to contact the agency to make the appropriate change.

With an established business credit report, you may get higher credit approvals, better interest rates and repayment terms on loans and lines of credit.

It’s equally important to establish a diversity of accounts with other types of business credit such as a business credit card or line of credit. Let these five simple steps serve as a starting point to building business credit for your company.

How to Build Business Credit Without Using Personal Credit?

You can take steps to build your business credit even if your personal credit isn’t great. And once you’ve established good business credit, you may be able to qualify for financing without a personal guarantee.

1. Incorporate and establish your business.

The credit bureaus need to know your business exists before they can create credit reports for it. Here are some of the steps you may have to take to start building business credit:

Incorporate your business or form an LLC (limited liability company). This ensures your business entity will be separate from your personal identity.

Get a federal employer identification number (EIN). This is a free service offered by the IRS, and it also serves to identify you as a business entity. Apply for an EIN here.

Open checking and savings accounts for your business. Make sure you use your legal business name for any of your business banking accounts.

Get a dedicated business phone line. You’ll also want to make sure it’s listed under your legal business name.

Register with Dun & Bradstreet to get a D-U-N-S Number®. This is a nine-digit number used to identify each physical location of your business. It’s free for all businesses required to register with the federal government for contracts or grants. Get one here.

2. Scan your business credit reports for errors.

Business credit reporting agencies gather information from a variety of sources. Your business credit reports may include:

• Your company’s contact information.
• An overview of your business type and industry, key personnel, number of employees, years in business, subsidiaries and branches, and sales.
• Financial data, including your business’s estimated sales, available credit, historical use of credit, payment history, credit inquiries and collection accounts.
• Public records information, such as tax liens, judgments, lawsuits, bankruptcies or fraudulent activity related to your business.
• Depending on the type of report, it may also contain a business credit score, recommendations from the business credit reporting agency for how much credit lenders should extend to your business and predictions from the business credit reporting agency on how likely your business is to fail.

Make sure the information in the reports is accurate and contact the bureaus individually to report and correct errors.

Wait… there’s more than one type of business credit report?

Yes! Dun & Bradstreet®, Experian® Business and Equifax® Business all create their own business credit reports. Some lenders and vendors may also turn to specialty business credit reports provided by other companies when evaluating your business.

3. Establish trade lines.

While a lot of information can wind up on your business credit reports, trade lines can be particularly important.

Business trade lines are lines of credit established between a business and a vendor, such as an account with an office supply company where the company allows the business to pay the account balance several days or weeks after receiving the inventory.

Vendors may report this account to any reporting agency, but they’re not required to do so. Depending on the type of credit report, a trade line that’s reported may include information such as your available credit, the amount owed, the terms of the account, recent activity and when you pay, relative to your due date.

You could have a business credit report without any trade lines, but it may be hard to build business credit without any. This is because your number of trade lines and your payment history may be factors in your business credit file.

Here’s where you need to watch out: Not every vendor will report your payment activity. So even if you always pay your vendors early or on time, you may not be building your business credit.

If you’re trying to boost your business credit, you may want to start opening business trade lines or accounts, such as a business credit card, with companies who report to the business credit reporting bureaus.

Just be careful about opening an account with an annual fee, as you don’t want to have to pay just to keep an account open and you may be able to find more cost-effective options.

You may also consider opening term accounts with suppliers who will report your activity to at least one bureau. You can ask the vendor if and who they’ll report your payments to before opening an account to ensure it’ll help your credit.

4. Pay on time — even better, pay early.

Your payment history with vendors, lenders and credit card issuers is an important factor in your business credit score. In fact, making on-time payments may be just as important with your business accounts as it is with your personal accounts.

“If you’re late by just a few days, those late payments may show up in your business credit reports,” Hanson warns. “With personal credit, a late payment may not be reported to the credit bureaus until you fall behind by 30 days.”

Paying early could be beneficial as well. “With some business credit scores, such as the Paydex® score provided by Dun & Bradstreet, to get higher than an 80 (out of 100), you need to pay your bills early,” Hanson adds.

5. Keep working on your personal credit.

We’ll be the first to admit that the relationship between business credit and personal credit can be a little confusing.

On one hand, personal and business credit reports rely on different information and can be completely separate.

On the other hand, it’s becoming increasingly common for business credit scores to rely on blended data that integrate the business owners’ personal credit.

Still confused? Think about it this way: It’s generally a good idea to assume that your personal credit matters for business, especially if you’re a sole proprietor or just starting out. If your personal credit isn’t quite where you’d like it to be, you may want to review a few ways to build your credit from scratch.

How to Build Business Credit in Canada

One of the most important aspects of running a small business is establishing a reputation with strong business credit. In addition, having strong business credit will help you get access to financing easier, and manage business risk and cash flow.

Similar to personal credit, your business also has a credit score. It is the track record of your business’ financial health. Other businesses, investors and financial organizations use this score to determine your business’ credibility and how likely you are to repay borrowed money.

The two major credit bureaus in Canada are Equifax and TransUnion. They calculate your business credit. Each agency has a different calculation method but usually ranges from 0 to 100. It’s a good rule of thumb to aim for a score of 80 or higher.

So you have now established business credit. The next step is to build solid business credit. A lot of the steps above can help you achieve that but there are two important steps that you must focus on to boost your business credit history.

1. Pay early!

In the steps above we advised that you should pay your bills on time. Paying them early is even better! That is, some business credit scores give you extra credit for paying your bills before their due date. Also, payment information on credit reports is usually more detailed than personal ones. So the faster you pay, the quicker you can build your business credit score.

2. Choose vendors/ suppliers carefully

Essentially, the second piece of advice is to choose vendors or suppliers that report to various business credit agencies. Sometimes they report to one over the there. So be sure to check your reports regularly.

How to Build Business Credit as a Sole Proprietorship?

Let’s look at a few different options for building business credit as the sole proprietor of a small business.

Incorporation

It’s common for sole proprietors of small businesses to pay for all their needs at the beginning with personal credit cards. By taking this route, however, you’re personally liable for those debts if your business fails.

More important to the discussion at hand is the fact that this approach, along with putting your personal credit score in jeopardy, also prevents you from building  business credit scores that will become crucial if your business succeeds.

One way to protect yourself and build business credit at the same time is to incorporate your business. By forming a corporate entity such as an S or C Corporation or a Limited Liability Company (LLC), you erect a safeguard between your personal life and the life of your business, and set yourself up to establish an independent business credit history by creating a distinct corporate identity.

You’ll apply for a Federal Tax Identification number from the IRS—more or less a social security number for your business—and this will allow you to register with business credit bureaus and submit corporate credit applications to suppliers.

While using personal credits cards to get your business up and running may initially seem like the quickest and simplest option, it’s essential to keep the big picture in mind. As an incorporated business, you’ll have (1) 10 to 100 times more financing outlets than what you could find relying on personal credit and a way to protect your personal credit during the inevitable ups and downs of business cash flow.

Business credit cards

Securing a business credit card is a relatively simple way of building up your business credit score, since you only have to focus on making your payments on time or early while maintaining a low (or no) balance on the card.

You don’t need a federal tax ID to apply for a business credit card; just your social security number. This means that your personal as well as commercial credit score could be affected by what you do with it, depending on how the issuer reports.

As a sole proprietor, there are factors, such as company size, that may negatively influence your business credit score and you will not be able to control. On the flip side, the factors that you can control can have a huge impact on your business credit. So don’t give up! Borrow what you can from what is available, and pay your bills early or on time.

Business Credit Score

A business credit score is a number, representing the likelihood your business will be approved for funding.

This is similar to, but not the same as, a personal credit score or personal FICO score. Most people are familiar with the concept of personal credit scores. There are a few key differences between these and business credit scores. For personal credit scores, the ratings range from 300 to 850, with most lenders requiring a minimum score of at least 600 for a personal loan.

Business credit scores range from zero to 100 and most small business lending companies require a minimum business credit score of 75. The Small Business Administration (SBA), banks, suppliers and other business lenders rely heavily on business credit scores and FICO scores when providing lines of credit or extended payment terms.

Although most start-up businesses must rely on personal credit for initial financing and use personal assets like homes for collateral, it is a good idea to establish a business credit score as quickly as possible to limit personal exposure. Create a “business credit profile” by separating your business credit from your personal credit.

Use only business credit cards for business expenses and do not mix personal and business credit cards. Keep your financial records, tax information and insurance coverages separate and you may even want to consider using separate banks.

If your business is just getting off the ground, you’re probably lending money to your business from your personal finances and recording it as “loans from officers.” Once you have been in business for a while you will want to establish separate credit for your business. This can limit your personal liability and improve your ability to secure a business loan.

Most small business lenders like to see a business credit score above 75, but local lenders may consider lower scores for small businesses or startups. Conventional consumer financing companies rarely make loans to individuals with credit scores below 500. If you are willing to pay higher interest rates with stiffer payment terms, there are other options available.

Experian Business Credit

A small business credit score is vital for separating your personal and business financial risk. As a forward-thinking small business owner, you know that credit affects your ability to obtain capital to develop your small business. Your business credit report can influence:

• The amount of your loan and what interest rates you’ll pay
• Your business insurance premiums
• Whether suppliers will extend credit terms

Experian’s small business credit reports can help you establish, improve and monitor your business credit score. So you get the funding and credit you need, when you need it.

Establish Small Business Credit

Jump-start your ability to get the funding and good credit terms you need to grow your small business. Start now by verifying the business information Experian has on your company with Experian’s BizVerify^SM credit report.

Conduct a business credit check, or learn how to establish business credit with Experian.

Build Small Business Credit

Once you are sure that you have a small business credit rating, take the first step to improving it. Get your Experian CreditScore^SM report and find out your business credit score today.

Check your business’s credit, or learn more about how to build small business credit.

Monitor Small Business Credit

Stay on top of your business’s financial health and guard against identity theft. Sign up for Experian’s credit monitoring service today and get 24/7 access to your small business’s credit report and score.

Start with a business search, or learn how to monitor business credit.

Business Credit Builder

The Credit Suite Business Credit Builder helps you build your business credit (that’s not linked to your SSN) step by step using a proven, field tested, business owner approved, and highly personalized process.

By using their user-friendly & intuitive software and the only full-service business credit adviser team in the industry, you’ll be guided every step of the way, simplifying your experience of obtaining business credit.

Credit Suite Helps You:

• Setup your business to meet lender and credit issuer Fundability standards to get automated approvals
• Setup and activate your credit profile with Dun & Bradstreet, Experian, and Equifax Commercial and get your free D-U-N-S number (which is essential to building great business credit)
• Get initial trade credit to build your business credit reports with no personal guarantee
• Get business credit without a personal guarantee

Credit Suite helps you get your business set up the right way to meet lender and credit issuer approval requirements, and get approved for initial business credit that reports and builds your profile with Dun & Bradstreet, Experian, and Equifax Commercial.

You can also monitor your business credit reports and scores in real-time with our Dun & Bradstreet, Business Equifax, and Business Experian monitoring direct integration, powered by Nav.

Once you are setup with the business reporting agencies, they help you access multiple revolving credit with limits of $5,000 – $50,000!

Types of Credit We Help You Access:

• Store business credit with many major national retailers
• Fleet credit for fuel and auto vehicle repairs for your primary vehicle, and a fleet of commercial vehicles
• Cash credit including Visa and MasterCard accounts you can use in most locations worldwide
• Auto vehicle financing to purchase or lease your primary vehicle or a fleet of vehicles, in your business name

How to Get Business Credit Card

The process of applying for a business credit card is fairly simple. You’ll need to research cards, pick the one you want, gather relevant information about your business, complete an application and await the issuer’s decision. While the actual application is quick and easy, preparing beforehand ensures that you choose the right card for your business and get approved.

If you think you fit the criteria for a business credit card and would like to get one to support your operations, you can apply anytime. While an application is simple and only takes five to 10 minutes to complete, there are several things you should do first to make sure you get the right card for you.

1. Research your options.

There are dozens of different business credit cards available. Some are great for small startups that need cheap capital, offering long 0% introductory periods. Others are ideal for more established companies with reps who do a lot of traveling, because they accumulate reward miles. Still other cards offer cash-back programs that offer great rewards for spending in certain categories.

Before you settle on a card, you should know your options. Study your business expenses to see what categories you’re spending money in that could qualify you for rewards. Look for available rewards programs and think about what form you’d like your rewards to take (miles, cash, statement credits, or other perks and benefits). Also, check cards for fees and interest rates.

2. Pick a card.

Once you’ve identified cards that offer the right mix of fees, rates and rewards, you’ll have to decide which one is right for you. Make sure that you read the literature carefully and understand all of the cardholder rights and obligations. If the card offers a 0% introductory period, find out when that period ends. If there are caps on rewards or limits on how rewards can be redeemed, you should be aware of them before you apply.

Also, be sure to check the card’s qualification criteria to make sure that you can qualify for the card you want.

3. Check your credit.

If you have been in business for three or more years, you may qualify for a business credit card using your business credit score. More likely, though, you’ll be applying with your own Social Security number, and issuers will check your personal credit score.

In either case, it’s usually a good idea to check these scores on your own before you apply to make sure they’re in good shape. The higher your scores, the better. If your personal credit score isn’t at least 650, you may want to consider holding off on applying altogether. That will give you time to improve your credit score by doing things like paying down debt, bringing accounts current or resolving past credit disputes.

4. Gather your info.

Once you feel that your credit is in good shape, you’re almost ready to apply. The last thing to do is to gather all of the information you’ll need as part of your application:

• Your business’s TIN (found on IRS Form W-7 or SS-4)
• Your Social Security number
• Social Security numbers for any business partners who own 20% or more of your company
• Your incorporation documents to confirm the number of years you’ve been in business
• Recent financials to check your revenue and monthly spend estimates
• A list of employees who will need cards

5. Apply.

Now that you’ve found the card you want, confirmed that your credit is in fine shape, and gathered all the relevant information that you’ll need to apply, it’s time to actually complete an application. This process is usually completed online and only takes a few minutes.

Depending on the data you enter initially, the card issuer may have additional questions for you or require other information. This may be completed in subsequent steps as part of your online application, or it may require separate follow-up via phone or email.

6. Await the card issuer’s decision.

After you formally submit your card application, the only thing left to do is wait and see if you’re approved. Approval decisions can take a few minutes, or they may take a day or two if additional follow-up is necessary. If approved, you’ll get your card(s) in the mail to activate and start using.

Business Credit Line

A business line of credit (LOC) is a revolving loan that allows access to a fixed amount of capital, which can be used when needed to meet short-term business, needs. A LOC is one of the tools a business can use to finance short-term working capital requirements, such as:

• Purchasing inventory
• Repairing business-critical equipment
• Financing a marketing campaign
• Bridging a seasonal cash flow gap

There are two types of business LOCs:

1 Secured Business Line of Credit—This type of LOC requires the business to pledge specific assets as collateral to secure the line. Since a line of credit is a short-term liability, lenders typically ask for short-term assets, such as accounts receivable and inventory.

Lenders don’t often require capital assets, such as real property or equipment, to secure a LOC. If the borrower is unable to repay the line, the lender will assume the ownership of any collateral and liquidate it to pay off the balance.

2 Unsecured Business Line of Credit—This type of LOC does not require specified assets as collateral—however a general lien and personal guarantee will likely be required. Because there is no specified collateral associated with this type of credit line, the business will likely need a stronger credit profile along with a positive business track record to qualify. Additionally, interest rates may be slightly higher; and unsecured credit lines are often smaller.

Uline Business Credit

Business credit accounts like Uline are a bit like business credit cards in that you can make purchases now and pay the vendor later. But rather than having a physical plastic card, you get store credit with one particular vendor.

In the case of Uline trade credit, you can open a net 30 account, which means you have 30 days to pay your invoice after making an office supply purchase.

Why do it? In addition to building your business credit, you’ll also keep your business cash flow more steady, giving you more cash on hand when you need it, even if you need to stock up on supplies.

The process to establish a business credit line with Uline is fairly simple.

The vendor application asks for both bank and trade references, which help the vendor understand how responsible you are in paying your debts and managing your business finances.

You’ll also be asked your DUNS number (that’s your Data Universal Numbering System), if you have one. If you don’t have one, it’s okay.

You won’t need to provide your Social Security number or business bank account information. Once approved for your account, you can select net 30 terms as your payment method at checkout when making an industrial supply order. You may also be notified of your Uline credit limit.

Can I Use my EIN to Apply For Credit?

If you have an employer identification number (EIN) — a nine-digit tax ID number assigned to your business by the IRS — you can use it to apply for a small-business credit card. But you will almost always have to also provide a Social Security number.

That’s because most small-business cards require applicants to personally guarantee the debt on the card. In other words, you are still responsible for paying back any debt, even if your business goes under.

As a result, when you apply for a small-business card with an EIN, the issuer will typically use your Social Security number to check your personal credit. Many small-business cards require good to excellent personal credit (typically FICO scores of at least 690) for approval.

There are some credit card issuers that require an EIN to apply but not a Social Security number. The Brex Card, for example, is a corporate card for startups that doesn’t require an SSN or a personal guarantee. Instead, it evaluates creditworthiness based on things like the company’s cash flow and spending patterns. It also requires a bank balance of $100,000 to qualify.

In general, though, corporate cards — where the company is on the hook for the debt and not the individual cardholder — are available for businesses with established credit histories, not for new businesses or very small businesses.

If you just opened up shop or are running a one- or two-person business, it will be difficult to find a small-business credit card that doesn’t require your Social Security number along with your EIN.

Can Self Lender Build Business Credit?

Self isn’t specifically geared toward business owners and it doesn’t build business credit. (To build business credit you need accounts that report to commercial credit agencies.)

As a small business owner, personal credit will likely be a part of any business creditworthiness evaluation, including most small business credit card issuers. Bad credit, or less-than-perfect credit can make it difficult to qualify for a personal loan and can increase the interest rate a borrower might pay on a loan they do qualify for.

What’s more, the FICO SBSS score, which is used to pre-screen applications for one the most popular SBA loan programs, takes into account the owner’s personal credit along with business credit information. So for many entrepreneurs, personal and business credit are closely intertwined. This also applies to most small business loans outside of the SBA too.

A survey by Nav found almost 40% of its small business customer base were “credit ghosts,” and had so little credit history that getting financing could be difficult. Self Lender can be a way to help develop a more robust credit history.

It may also be helpful for those who want to start a small business in the future. One of these accounts can provide a disciplined framework to build credit while creating a small savings account that can then be used to help cover the cost of basic start up tasks that can help get a business off the ground.

Self offers “credit builder” accounts. This means you essentially “borrow” a CD (in this case, an FDIC-insured certificate of deposit bank account) and pay for it by making 12 or 24 monthly payments. At the end of that time period, you have full access to the money in the savings account, plus a credit reference on your personal credit report with Equifax, Experian and TransUnion.

Self will conduct a “soft inquiry” into your credit and payment history when you become a member so that it can provide free credit monitoring. Soft inquiries do not affect your credit scores. In addition, the bank that Self partners with will conduct a credit check with ChexSystems, which collects and reports information about closed checking and savings account.

Monthly payments made on your Self account will be reported to all three major credit reporting agencies (Experian, Equifax, and TransUnion). A monthly payment that is more than 30 days late will be reported as a late payment so you want to pay your account on time, just as you would with any other account that can impact your credit.

A credit builder installment loan can be a complement to a secured credit card, which is another way to add a credit reference to your credit reports.

Self accounts are categorized as “installment loans,” which is different than “revolving accounts,” which is the category credit cards fall under. Having different types of credit accounts can impact the “credit mix” factor which makes up about 15% of credit scores.

What is The Easiest Business Credit Card to Get?

1. The Capital One Spark Classic for Business
2. Wells Fargo Business Secured Credit Card
3. The Capital One Secured MasterCard
4. Discover It Secured Credit Card
5. Bento for Business Visa® Debit Card

If you’re a business owner, using a business credit card for business expenses offers some big advantages. You’ll have access to a steady stream of working capital to finance your small business, and the potential to earn great perks and rewards.

Unfortunately, if your credit score is less than stellar, you might be concerned about whether there are easy business credit cards to get approved for.

1. Capital One Spark Classic for Business

We recommend the Capital One Spark Classic for Business credit card as your first stop when looking for an easy business credit card. That’s because, at 550, this card has one of the lowest minimum credit score requirements you’ll find on an unsecured business credit card.

The Spark Classic has no annual fee, plus the card offers 1% cash back on every dollar you spend, with no limit on how much cash back you can earn. Those are perks that are hard to come by in business credit cards for bad credit.

As an unsecured credit card, Capital One reports card activity to the three major personal credit bureaus—so this card can help you build or rehab your credit score, as long as you’re paying your bills on time. Just be careful because Capital One also reports missed payments to the personal credit bureaus, and you don’t want your credit score to take a hit.

2. Wells Fargo Business Secured Credit Card

The Wells Fargo Business Secured Credit Card is a secured business credit card. Since it’s secured, the Wells Fargo Business Secured Credit Card is an easy business credit card to get. They’ll work with borrowers who have credit scores as low as 450. Depending on how much cash you deposit, you’ll receive a credit line of any amount between $500 and $25,000.

Unlike most secured credit cards, the Wells Fargo Business Secured Credit Card comes with more perks. You can choose to receive cash back or rewards points on all of your purchases.

Should you choose cash back, you’ll earn 1.5% cash back on every purchase with no limit, making this an even stronger reward program than the Capital One Spark Classic. Should you choose rewards points, you’ll earn 1 point per $1, plus a 1,000 points bonus of when you charge more than $1,000 per month to the card.

Since this secured credit card intended specifically for businesses, you can order up to 10 employee cards. There is an annual fee of $25 per card, whereas the Capital One Spark Classic doesn’t charge an annual fee. You’ll also have access to Wells Fargo Business Online, so you can easily track and manage spending across all those cards.

Here’s another reason why this is a great starter business credit card: Wells Fargo periodically reviews your account usage to determine whether you’re eligible to graduate to an unsecured business credit card.

They’ll make that decision based on factors like timely bill payments, low credit utilization, and personal credit score—which is just more incentive to use your business credit card responsibly, and boost your credit score in the process.

Keep in mind, however, that only existing Wells Fargo customers can apply for the secured business credit card online. If you don’t have an existing relationship with the bank, you’ll have to apply for this credit card in person.

3. Capital One Secured Mastercard

The Capital One Secured Mastercard is actually a personal credit card, not a business credit card. We don’t recommend mixing your personal finances with your business finances, but there are very few secured business credit cards on the market.

So, responsibly using a secured personal credit card strictly for business purposes could be a good way to start building your credit. Just avoid mixing personal and businesses expenses on the same card.

The Capital One Secured Mastercard is one of the most flexible secured credit cards on the market. While most secured credit cards require that you put down 90%—if not all—of your credit limit’s worth as a security deposit, the Secured MasterCard lets you put down a security deposit of as small as 25% of your credit limit, depending on your creditworthiness.

Additionally, if you’re not able to put down your security deposit all at once, this card lets you pay it in installments, as long as it’s paid in full within 80 days.

The card issuer accepts credit scores below 550 to qualify, so that’s great news for those with challenged credit scores. The minimum required cash deposit is either $49, $99, or $200, and those with lower credit scores have a lower minimum required cash deposit.

The initial credit line for cardholders is $200, but you’ll have the opportunity to raise that credit line if you make your first five monthly payments on time.

Capital One does not charge any annual fees on this card, which is also good news since you’re already putting down cash to create your credit line. On the downside, the Capital One Secured Mastercard doesn’t come with any cash back or rewards perks.

However, Capital One does report card usage to all three credit bureaus, so if you use this card responsibly, you’ll be able to to build up your credit score and graduate to an unsecured credit card soon.

4. Discover It Secured Credit Card

The Discover It Secured Credit Card is another secured personal credit card. As with the Capital One Secured Mastercard, you can choose to use this card exclusively for business to build up your credit. Discover will qualify you for a credit line, and then you’ll need to make a cash deposit that matches that amount.

Discover does not charge an annual fee for this card, and they offer a pretty good cash back program. You will earn 2% cash back on restaurant and gas station purchases, up to $1,000 in spending each quarter. You will earn 1% cash back on all remaining purchases, with no limit. Plus, after you’ve had the card for one year, Discover will match all the cash back you’ve earned.

This a good card for rebuilding credit because Discover reports your payment activity to all three credit bureaus. Plus, starting eight months after you open your credit card, Discover will review your account monthly and see if you’re eligible to receive a refund of your security deposit (essentially making this an unsecured credit card).

You can access your FICO score for free at any time on your monthly statement, mobile, or online account, so you can track how your credit score is improving over time.

5. Bento for Business Visa® Debit Card

The Bento for Business is actually not a credit card at all, but a prepaid business debit card. Similar to a secured business credit card, you’ll load up your Bento for Business card using your own funds, and that amount becomes your credit line.

You’ll hook up your business bank account directly to your Bento card, so you can easily, and securely, fund your cards anytime you want. Then, you can use the Bento anywhere that accepts Mastercards.

Unlike a secured business credit card, you’re not paying monthly bills to a credit card company, which means you can’t build credit with this card. But that also means that Bento doesn’t check your credit score at all when you apply, making this a great option for credit-challenged small business owners.

The real benefits of the Bento card are in its solutions for small business owners who need to manage employee spending. First off, you can order as many employee cards as you need, and set specific budgets on each of those cards. You’ll pay one flat monthly fee per account depending on the number of cards you need on a sliding scale.

Read Also: What is Qualified Business Income Deduction?

Plus, the Bento can integrate into your business accounting software, so all card activity is readily available for you come tax season. Bento also has a mobile app and a dashboard, so you can track exactly which employees are using their cards—and where and how they’re using them—and manage their budgets accordingly.

Again, you can’t use the Bento to build your credit. But, the Bento doesn’t require any minimum credit score to qualify, making this an incredibly easy business card to get approved for. If you’re hoping to build credit, you’re best off using the Bento in addition to either a secured credit card, or the Spark Classic, once you can swing that 550 minimum credit score.

Bottom Line

Having a business credit score is essential to running a financially viable and healthy business. It proves to lenders and other businesses that your company is financially healthy and capable of making important payments.

It will not only help you get loans but can also provide you with opportunities to avoid prepayment. As a negotiation tool, a good credit score can help you drive down prices or obtain more favorable interest rates and terms on financing packages from banks and online lenders.

The best way to build credit, once your business is legally established, is to pay your bills on time – and early where possible. By opening credit cards and keeping your credit utilization below 30%, you can further establish a favorable credit rating.

Keep building your company’s financial reputation, and check in with the major credit agencies from time to time to ensure your credit score is accurate.