Updated: Jan 26

One of the biggest mistakes people make in small business is the failure to separate their personal credit and assets from their business credit and expenses. Few realize the impact of that oversight begins at the most basic level where credit begins – at the bank. Failure to establish a business bank account in the company name, address, and phone number is the single weakest link in the whole of the small business credit process.

So who’s getting credit for your positive payment habits?

If you pay your business expenses with a personal credit or debit card they are considered business expenses, albeit paid for with your personal credit, so, in most cases, those payments will not impact your business credit profile. While most small businesses are struggling to establish a credit history for their business, they fail to recognize that business credit actually can be established fairly easily as a by-product of how they pay their existing expenses. They also fail to realize that they may not actually be achieving their goals if they are missing this one seemingly unimportant step.

The majority of the payments that reflect in the business credit profile due so as a result of auto-reporting by your vendors, but there is more to building credit than opening an account with your suppliers in the business name. The expenses also need to be paid in the business name. If the vendor is reporting the payment as paid by personal credit or debit card, then it will likely only reflect on the personal credit file.

By-and-large, D&B accepts only business credit expenses into the credit fi