What you should know about business credit.

It is the credit history in your business's name, not in yours. It is also called commercial credit. It is kept by business credit bureaus such as Dun & Bradstreet, Experian Business and Equifax Business, and it is built from the payments your vendors and lenders report to them; not all of them report. Source: Experian.

It is not required. According to the SBA, if you do business without registering any entity, you are already a sole proprietor, and Dun & Bradstreet also assigns D-U-N-S numbers to that type of business. But as a sole proprietor you are personally responsible for the business's debts, banks are reluctant to lend to it, and some vendors and lenders require a registered entity. An LLC or a corporation exists legally apart from you. Which type of entity suits you has legal and tax consequences: check with an accountant or a lawyer. Sources: SBA and Dun & Bradstreet.

Nothing: the IRS never charges for an EIN, and it warns about websites that charge to apply for you. If you apply online at irs.gov and the application is approved, you get the number as soon as you finish. The online application is only available during set hours, is for businesses whose principal place of business is in the United States, and allows one EIN per responsible party per day. Source: IRS.

With an ITIN, yes, and online: to apply on irs.gov, the business's responsible party needs their Social Security number (SSN) or their ITIN. An EIN does not work for this. If they have neither, they cannot apply online; the IRS explains how to apply by fax or by mail with Form SS-4. Whichever way you apply, the EIN is free. Source: IRS.

Yes, it is free: Dun & Bradstreet does not charge to give you a D-U-N-S number (also written DUNS). For the free option, it says the process can take up to 30 business days. It also sells a paid option that delivers the number in about eight business days, but you don't need it. Source: Dun & Bradstreet.

Not anymore. Since April 4, 2022, the federal government identifies businesses in SAM.gov with the Unique Entity ID (UEI) instead of the D-U-N-S number. The D-U-N-S number is still used for your business's file at Dun & Bradstreet, and some vendors ask for it. Source: GSA.

It is an account with a vendor that sells to you today and gives you 30 days to pay the full invoice. It adds to your business's credit history when the vendor reports your payments to a business credit bureau, and not all vendors do. If you pay late, that can be reported too. Before you open one, ask whether they report and to which bureau. Sources: Experian and Dun & Bradstreet.

It is Dun & Bradstreet's payment score, from 1 to 100, calculated from the payments your vendors report. An 80 means you pay on the agreed date, and above 80 means you pay early. The score is weighted by amount: accounts with more credit count more than small ones. Payments that nobody reports do not count. Source: Dun & Bradstreet.

There is no fixed timeline. Dun & Bradstreet says there is no standard amount of time to establish a business credit file: it depends, among other things, on how your business is doing and on whether your vendors report your payments. Payments that nobody reports do not count toward the PAYDEX score. Be wary of anyone who promises you a timeline. Source: Dun & Bradstreet.

Dun & Bradstreet lets you review and update your business's information for free on its website. Seeing your scores, such as PAYDEX, on an ongoing basis is a paid service, and you don't need it to have the number or the file. Source: Dun & Bradstreet.

It is your signature as an individual backing a business debt: if the business doesn't pay, the debt is yours. It is very common: a 2021 CFPB report cites an FDIC survey in which more than 85% of small banks and 95% of large banks said they require one on small business loan applications. Source: CFPB.

It can, in several ways. When you apply, the issuer usually checks your personal credit, and that inquiry stays on your report. Most issuers ask for a personal guarantee: if the business doesn't pay, the debt is yours. And each issuer reports differently: some send nothing to your personal credit history as long as you pay on time, others report all activity, including the balance, and others only report when there is a serious delinquency. In that last case, a late payment hurts you, but your on-time payments don't help you. Before you sign, ask whether they require a personal guarantee, whether they report to your personal credit history and in which cases. Sources: Experian and CFPB.

You can start, yes. After you set up your business, if it is in the U.S., you can apply for its EIN online at irs.gov, for free, using your ITIN as the responsible party's number. From there on, each bank, lender or vendor sets its own requirements, and many banks and lenders also check the owner's personal credit or ask for a personal guarantee. Before you apply, ask them directly whether they accept an ITIN. Sources: IRS and CFPB.

A CPN (“credit privacy number”) is a nine-digit number in the same format as a Social Security number, which some people sell as a “new credit identity.” It is not issued by the Social Security Administration or recognized by any government agency, and using it instead of your Social Security number to apply for credit is not legal. Experian warns that these numbers are often stolen Social Security numbers, frequently from children, prisoners or older adults, and that giving a false Social Security number on a credit application is a federal crime. The FTC puts it this way: if you use a number that isn't yours to apply for credit, you won't get it, and you risk fines or jail time. Sources: Experian and FTC.

Not to apply for personal credit. If someone tells you to get an EIN to have a “new credit identity” or to hide your credit history, it is a scam: the FTC warns that with a number that isn't yours you won't be approved, and you risk fines or jail time. The EIN identifies your business to the IRS and is used for the business's accounts. Even so, at the start many business cards and loans check your personal credit and ask you for a personal guarantee. Source: FTC.

Willie is a business credit strategist and coach, and he has been behind Tu Negocio Importa since 2018. You can find him on Instagram at @tunegocioimporta, where he shares business credit content in Spanish. Calls with him can be in English or Spanish.

No. Tu Negocio Importa focuses on organizing your business and on business credit education.

We can talk about where you are now and the questions you need answered. The requirements of any product are reviewed with the company that offers it.

That is the goal of building a credit history of the business's own, but it is not a guarantee for every product. Each provider can set different conditions.

No. We don't promise approvals, amounts or timelines. The call is for learning about the process and deciding whether the coaching is right for you.

The prices and scope of the coaching are explained on the call, before you sign up for any service.

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