Lauren Smith, WalletHub Staff Writer
@laurenellesmith
You can build business credit using an Employer Identification Number (EIN) by opening a credit card account or taking out a loan in the company's name then making on-time payments. First, you must incorporate the business, then obtain an EIN, and apply for a line of credit. Responsible usage over time will strengthen your business credit profile.
How to Build Business Credit Using an EIN
Establish your business entity
Register your business as a legal entity, such as a corporation or LLC. This step is essential to separate your personal and business finances.
Obtain an EIN
Apply for an EIN from the Internal Revenue Service. You can do this online through the IRS website. An EIN serves as the unique identifier for your business.
Establish a relationship with a bank
Use your EIN to open a dedicated business bank account. This is a recommended step so you can create a clear separation between your business and personal expenses.
Additionally, you can establish a relationship with the bank by doing so. This can be particularly helpful if the business is new and you would like to acquire credit lines in the future, although the bank account itself does not directly affect your credit.
Apply for a business credit card
Research and apply for a business credit card that reports to business credit bureaus. Use the card responsibly, keeping balances low and making on-time payments. These activities help build a positive business credit history.
Monitor and review your credit reports
Regularly monitor your business credit reports from major credit bureaus. Ensure that the information is accurate and up to date. Dispute any errors you find to maintain the integrity of your credit profile.
Pay other businesses on time
You can build credit by establishing accounts with vendors, suppliers, and service providers. Some companies may report your payment activity to business credit bureaus, like Dun & Bradstreet, Experian, and Equifax, which can raise your score over time.
Gradually expand your business credit
As your business’s financial profile strengthens, consider applying for additional credit lines, loans, or leases. Responsible credit use can further enhance your business’s credit history.
You can compare the best credit cards for new businesses and the best business credit cards overall right here at WalletHub.
People also ask
Can I use my EIN to get a credit card?
You can get a corporate card or certain co-branded business credit cards if you want to use only your EIN. Most small business credit cards will require a Social Security Number because you will have to personally guarantee any debt.
Credit Cards You Can Get Using Your EIN Only
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Other business credit cards will require an SSN because you are personally liable for any charges on the...
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