Top myths — debunked

  1. Myth: Only large companies need business credit.
  • Truth: Small and new businesses rely on business credit to get vendor terms, loans, and lower insurance or supplier requirements. Good business credit separates personal and company risk and can unlock better financing earlier (U.S. Small Business Administration: https://www.sba.gov).
  1. Myth: Checking my business credit will hurt the score.
  • Truth: Owner checks through monitoring services are typically soft inquiries and don’t lower scores. Lenders’ hard inquiries can affect certain models, but this impact is small compared with payment history and public records (Experian Business: https://www.experian.com/business/).
  1. Myth: Business and personal credit are the same.
  • Truth: They are different. Business credit reports and scoring models focus on company activity and trade accounts. Personal credit usually affects small-business financing only when owners provide a personal guarantee. Read more on how they differ: How Business Credit Scores Differ From Personal Scores.
  1. Myth: A single score applies across all bureaus.
  • Truth: Each bureau uses its own scale and criteria. For example, Dun & Bradstreet issues the PAYDEX score (1–100), while Experian and Equifax use different models and ranges. Always check the specific bureau your lender uses (Dun & Bradstreet: https://www.dnb.com).
  1. Myth: Paying the minimum is enough.
  • Truth: Late payments, high utilization, and unresolved public records (liens, bankruptcies) carry more weight than minimum payments. Timely vendor payments and lower utilization drive bigger improvements.
  1. Myth: You can’t build business credit from scratch.
  • Truth: You can. Start by registering an EIN, opening business bank accounts, getting trade accounts that report, and registering with Dun & Bradstreet for a DUNS number. See a practical guide: Building Business Credit from Scratch.

How business scores are actually calculated

  • Payment history and supplier trade lines — very high impact.
  • Public records (liens, judgments, bankruptcies) — very high impact.
  • Credit utilization on business cards and lines — moderate to high impact.
  • Credit mix and account age — moderate impact.

Scoring weights and data sources differ by bureau. That’s why the same business can show different risk levels to different lenders (Experian: https://www.experian.com/business/).

Practical steps that work (what I do with clients)

  • Separate business and personal finances: use an EIN and a dedicated business account.
  • Get vendor accounts that report and pay them early or on time.
  • Register with Dun & Bradstreet to establish a DUNS number and monitor your record (https://www.dnb.com).
  • Monitor reports monthly with services like Nav or CreditSignal and dispute inaccuracies quickly.
  • Keep revolving balances low — aim for under 30% of available credit when possible.
  • Avoid unnecessary hard credit pulls; shop lenders within a short window when possible.

For a 90‑day improvement plan and specific tasks, see: Improving Your Business Credit Score: Practical Steps in 90 Days.

Quick checklist to stop common mistakes

  • Register EIN and business phone number.
  • Open a business bank account and card.
  • Ask suppliers to report payments.
  • Review reports monthly and file disputes within 30–60 days.
  • Track due dates and automate payments where feasible.

Real-world caveats

  • Some lenders require personal guarantees for small businesses. That doesn’t mean business credit isn’t useful; it still improves borrowing terms and vendor access.
  • Score improvements take time. Correcting errors can produce fast gains; behavioral changes (consistent on-time payments) compound over months.

Sources and further reading

Professional disclaimer: This content is educational and not individualized legal, tax, or financial advice. In my practice advising small businesses for 15 years, these steps repeatedly help owners improve financing outcomes. For tailored guidance, consult a qualified advisor or lender.