How to Build Business Credit (And Why It Matters)

Starting a business is exciting-but let's be real: figuring out finances can feel like a confusing maze. One thing that often gets overlooked early on? Building business credit.

Whether you're launching your first side hustle or scaling your LLC, strong business credit can unlock opportunities-like better financing, bigger vendor limits, and more freedom to grow. And the best part? You don't need to be a finance expert to get started.

At Middlefield Bank, we work with small business owners every day, and we're here to help you understand not just how to build business credit-but why it matters so much.

Let's break it all down.

What Is Business Credit and Why Does It Matter?

Think of business credit as your company's financial report card. It shows how reliably your business pays its bills and manages its money-just like a personal credit score, but strictly tied to your business.

Why it matters:

• Easier access to funding. Lenders are more likely to say "yes" when your business credit is solid.
• Lower interest rates and better terms. Good credit = more negotiating power.
• Higher credit limits. More buying power to stock inventory, upgrade equipment, or handle seasonal shifts.
• Trust from vendors and suppliers. A strong score can help you get net-30 or net-60 terms with suppliers.
• Keeps your personal credit separate. So your business hiccups don't hurt your personal finances.

Bottom line: Building business credit helps you grow with confidence-and protects your personal wallet, too.

Step-by-Step: How to Build Business Credit

This part may sound complicated, but it's really about setting up your business the right way from the start.

1. Register Your Business Properly

If you haven't already, form a legal business entity like an LLC or corporation and register it with the state of Ohio. This creates a separate legal identity for your business, which is key for building credit.

Sole proprietor? You can still build credit, but separating yourself legally from your business gives you more options down the road.

2. Get an EIN (Employer Identification Number)

An EIN is basically a Social Security number for your business. The IRS gives them out for free, and you can apply online in minutes.

You'll need an EIN to:

• Open a business bank account
• Apply for credit in your business name
• File taxes

Pro tip: You don't need employees to get an EIN-it's just a way to establish your business as its own financial entity.

3. Open a Business Bank Account

Here's where it gets real. A business checking account lets you start separating business and personal finances (a must for credit building and tax time).

At Middlefield Bank, our business checking accounts are designed for local entrepreneurs-simple, accessible, and backed by real people who want to help your business grow.

Bonus: Once you've opened a business account, it's easier to qualify for other products-like credit cards or lines of credit.

4. Set Up a Business Address and Phone Number

Even if you're running things from home or your laptop, having a dedicated business address, phone number, and email makes your company look more legit to lenders and credit bureaus.

You don't need a storefront. Just keep it consistent across:

• Your business license
• Bank account
• Website
• Invoices
• Any applications for credit

5. Apply for a Business Credit Card

This is where you really start building credit. A business credit card allows you to:

• Make purchases in your business's name
• Establish a payment history
• Boost your credit utilization ratio

Just remember:

• Use it for business purchases only
• Pay off the balance each month
• Keep usage below 30% of your limit

Middlefield Tip: Our business credit card options are built for small businesses-whether you're just starting out or growing fast. Earn rewards while building credit and keeping expenses organized.

6. Work with Vendors That Report to Credit Bureaus

Not all vendors report to commercial credit bureaus-but if you find ones that do, you can boost your credit score just by paying your bills on time.

Here's how to do it:

1. Ask vendors if they report to bureaus like Dun & Bradstreet, Equifax Business, or Experian Business.
2. Set up net-30 or net-60 terms (paying in 30 or 60 days).
3. Pay on time-or early-for the best impact.

Even small, consistent purchases (like office supplies or packaging materials) can help your credit grow.

7. Monitor and Manage Your Business Credit Score

Just like personal credit, business credit scores can change based on:

• Payment history
• Credit usage
• Length of credit history
• Public records (like liens or judgments)

You can check your score through:

• Dun & Bradstreet (D-U-N-S number required)
• Experian Business
• Equifax Small Business

It's worth reviewing your report regularly to:

• Catch errors
• Spot fraud early
• Make sure your on-time payments are being reported

8. Use Financing Strategically to Build Credit

If you're thinking long-term, using small business financing wisely can boost your score and help you grow.

Here are a few examples:

• Business loans - Use for major expenses like expansion or equipment
• Lines of credit - Tap into flexible funding when cash flow gets tight
• Equipment financing - Buy or lease machinery and tools for growth

Middlefield Tip: Need funding to grow? Talk to one of our local business bankers about our small business loan and credit solutions-tailored to the way you operate.

Avoid These 4 Common Business Credit Mistakes

Let's keep you on the right track. Watch out for these all-too-common credit blunders:

1. Using personal credit for business purchases

It might be tempting-but it doesn't help your business credit, and it puts your personal credit at risk.

2. Missing or making late payments

Even one late payment can lower your score. Set reminders or automate your payments when possible.

3. Maxing out credit cards

Keep your credit usage below 30% of your limit to maintain a healthy score.

4. Ignoring your credit reports

Errors happen. Monitor your reports regularly and dispute anything inaccurate.

Why Building Business Credit Early Pays Off

You might not need a business loan today-but what about next year? Or when a big opportunity shows up?

Building credit before you need it means you'll be ready when it counts.

Strong business credit helps you:

• Scale faster when opportunities arise
• Protect your personal finances
• Build trust with vendors and partners
• Qualify for better financing and insurance rates
• Gain long-term financial stability

Ready to Build? We're Here to Help.

Building business credit isn't just about loans and scores-it's about setting your business up to grow, thrive, and succeed for the long haul.

Middlefield Bank is proud to support Ohio's entrepreneurs with the tools, products, and friendly guidance you need to get there. Whether you're opening your first business account or looking for funding, we're here to help.

Stop by a Middlefield Bank branch or visit middlefieldbank.bank to learn more about our business banking solutions.

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