How to establish credit and improve your scores

I have been in business for myself three years now, and when I started, I never thought about establishing business credit. Like many small business owners, I relied on the strength of my personal credit to fund my business. But when you use personal credit, your mortgage, auto loan and personal credit cards affect your ability to qualify for a business loan. Using business credit separates your personal activities from that of the business. Your business credit is dependent on your company's payment history, assets, cash flow and other financials.

The credit bureaus that monitor business credit are not the same three that monitor your personal credit. Experion monitors business and personal credit, but the scores are somewhat different. Business credit scores run from 1 to 100, with 100 representing the best score. Equifax offers a “Small Business Credit Risk Score,” which ranges from 101 to 992. Dun & Bradstreet is the other bureau that monitors business credit. Its credit scores range from 101 to 670. Building your business credit can take some time, but it will make you eligible for better offers from creditors.

To start building your business credit, here are some steps you should take: