Your personal credit score is a report card (of sorts) for how responsible you’ve been with your credit. If you apply for a mortgage, auto loan, or credit card, the lender will run your credit to gauge your trustworthiness.
There’s another type of credit score solely for businesses to reflect how responsible an entity has been with its credit. In other words, this is a company report card, not an analysis of the business owner’s personal credit. You can get a business credit score by using credit that reports to business credit bureaus.
Dun and Bradstreet is one of the three major business credit bureaus (along with Experian and Equifax). Because of this, it’s a good idea to open and responsibly use business credit cards that report to it. Let’s look at how to build a credit profile with Dun and Bradstreet.
How business credit cards report to credit bureaus
The credit bureaus to which your business credit card reports will vary depending on several factors. Let’s take a quick look at them.
Credit card issuer
Many business credit cards will not show up on your personal credit report. Your credit card activity will remain separate even if you use your Social Security number to apply. However, if your account defaults, your personal credit will bear those blemishes.
Note that this isn’t the case for all business credit cards. Some issuers deliberately report small business card activity to your personal credit.
Attaching an EIN to your application
During the application process for a business credit card, you can add an Employee Identification Number (EIN) along with your Social Security number (SSN). An EIN is an IRS-issued Federal Tax Identification Number that businesses can apply for. It’s sort of like a SSN for your business–though not as sensitive.
Adding an EIN to your business credit card application can help you to build business credit. Your activity on that card will be associated with your EIN.
Additionally, some business credit cards (namely, corporate cards) allow you to open a credit card with only an EIN–no SSN necessary. This is often possible if your business credit profile is well established and you’re making notable revenue. Opening a business card with an EIN will guarantee that the account doesn’t appear on your personal credit report.
D-U-N-S number
A Data Universal Numbering System (D-U-N-S) number is not used for tax purposes, but is instead a number that other businesses can use to determine your company’s financial wellbeing. If you want a business credit score generated by Dun and Bradstreet, you’ll need one.
For example, if you’re asking for a loan from another company, they’ll likely run your D-U-N-S number to decide if you’re a suitable candidate. “Dun and Bradstreet tends to give the lender a little more security,” states CPA Karlene Barry. “Your [business] credit is based on your payment history–and they also look at whether other lending entities are comfortable with you. What do you have for collateral?”
Any business can apply for a D-U-N-S number through the Dun & Bradstreet website–it’s totally free.
Why your business needs to build business credit
“Over the life cycle of a business, credit cards, lines of credit and term loans play an integral part in helping to support sustainable growth,” says Michael Kuhn, SVP and Team Lead at Cambridge Savings Bank. “Many businesses, especially those businesses that are B2B, rely on lines of credit to smooth cash flow. B2B businesses generally have to pay vendors and employees prior to being paid for goods and services. As a result, without this “bridge”, many businesses would not be able to sustain operations due to a lack of capital.”
The Federal Reserve (PDF) offers stats to back this up. In 2022, a whopping 40% of employer firms applied for either loans, lines of credit, or cash advances. Of those businesses, 65% applied to meet operating expenses–and 53% were interested in expanding business, pursuing new opportunities, or acquiring business assets.
For those with companies that have meaningful expenses, it’s a good idea to begin building business credit as soon as possible.
Another reason you may want to build business credit is for the ability to avoid staking your personal finances on the success of your company. “If you have significant personal assets, you want to insulate them from your business,” adds Karlene Barry. “If the business were to go belly up, you’d want to try to create the perception that it’s a separate entity.”
Which business credit cards report to Dun & Bradstreet?
While not a comprehensive list, you can expect the following credit cards to report to Dun and Bradstreet.
- Capital One Venture X Business Card
- Capital One Spark Cash Select for Excellent Credit
- Capital One Spark Miles Select for Business
- Capital One Spark Miles for Business
- Ramp Business Card
- Nav Secured Card
- U.S. Bank Business Altitude™ Connect World Elite Mastercard®
- U.S. Bank Triple Cash Rewards Visa® Business Card
- U.S. Bank Business Leverage® Visa Signature® Card
- U.S. Bank Business Platinum Card
The Small Business Financial Exchange (SBFE), a nonprofit trade association, collects other data points relevant to business credit cards. It’s not a credit bureau, but it does make its data available to Dun and Bradstreet.
Tips to help build your business credit
Business credit bureaus consider similar details to consumer credit bureaus when deciding your business credit score (think factors like payment history and credit utilization). However, they also look at your industry, the size of your business, and even companies with which you’ve previously done business.
Here are the top things you must do to foster (or maintain) a solid business credit score.
Keep up with payments
One of the most important factors to a credit score is on-time payments. Punctuality demonstrates that you’re running an establishment that can be trusted with a loan. When you’re late on a payment, it (rightfully) raises red flags with lenders and other businesses with which you may want to do business in the future.
In addition, delinquent business credit card accounts will often be detrimental to your personal credit. Even business credit cards that don’t otherwise report to consumer credit bureaus will tattle on you if you’ve got seriously late payments.
Try to pay your balance in full
In short, credit utilization is the amount of available credit you’re currently using. For example, if you have a credit card with a $25,000 limit and use $2,500, your credit utilization is 10%.
Generally, a lower credit utilization is better. The fact that you’ve got a large amount of available credit indicates that you aren’t scrambling for money. Not all small business credit cards will ding you for a high credit utilization–in fact, many don’t report it to consumer credit bureaus.
Even so, keeping your balances as low as possible is wise. Pay your balances often and in full to keep your amounts owed low at all times.
Find cards that offer benefits your business needs
The business credit card landscape is extremely diverse. Whether you’re a burgeoning C corp with hundreds of employees or a sole proprietor who sells items on eBay on weekends, there’s a business credit card to suit your requirements perfectly.
To find the perfect business credit card for your situation, you should first identify your company goals. Larger businesses will likely opt for a product that gives the most control over employees. For example, some products allow you to set a spending limit unique to each employee card–and even stipulate the merchants at which the card can be used.
Smaller businesses like sole proprietors may be more focused on a return for everyday spending. Cash back and travel points are the two common credit card reward buckets. Alternatively, if you’ve got a lot of upcoming expenses for which you don’t think you’ll be able to quickly pay off, a 0% intro APR business credit card may serve you the best.
The takeaway
If you operate as a sole proprietor (say, a freelance writer, DoorDash driver, etc.), you probably don’t need to build business credit and may be able to use a personal credit card for business expenses. But if you’re interested in expanding your business, or if you’ve got significant revenue with multiple employees, a good business credit score can be the difference between securing the financing needed to meet operating expenses and closing shop.
You should acquire an EIN and D-U-N-S number as early as possible to begin building your business credit profile. As long as you run your company responsibly, the credit score you generate will be your golden ticket in the business world.
