Your small business credit score determines your creditworthiness. It can affect your ability to qualify for loans or connect with vendors and other businesses, but building credit is a long-term investment. Taking the steps to build your credit early can help you out in the long run.

How Is a Business Score Different From a Personal Score?

The only real difference between a business credit score and a personal credit score is that one is primarily for business. However, in order to use this distinction, you need to separate your finances. Your business should have a bank account that’s entirely separate from your personal finances, both to establish credit and to minimize the risk of legal issues. Business scores are also measured differently, ranging from zero to 100.

How Do You Start Building Credit?

Start building your credit by first establishing your business’ finances. Obtain a federal taxpayer identification number and then open a business bank account, which will hold all your revenue. Then, open a business credit card to start making payments. Use it like you would a new personal card, making small purchases at first and ensuring that you pay it off in full before the end of each month. You can also start establishing credit with vendors and suppliers. If you choose this route, make sure they report to a business credit reporting agency. This way, a profile is automatically created for your business.

How Do You Keep Your Credit Score High?

There are several components that make up your credit score, including payment history, credit utilization, business history, and trade experiences. Your payment history and credit utilization have the biggest effect on your score. To keep your score up, always pay your debts on time and try to keep your credit utilization below 30%. It won’t affect your score as much, but new businesses aren’t going to get the highest scores right away. You’ll have to prove over time that you’re financially responsible. The number of trade experiences you have both historically and currently can also affect your score. You don’t want to have too many, but showing that you can juggle multiple lines of credit and pay your bills in a timely manner can really improve your score.

Business credit can make a world of difference for your business. Start building credit as soon as possible so that you don’t have to wait so long to reap the benefits.