Last week, while having coffee with a friend who runs a small café, I heard a sigh-laden story.

He looked into leasing a new espresso machine under the store's name but ended up having to guarantee it with his personal credit.

Even though it has been a few years since he opened the shop, he felt a bit disappointed that they only looked at his personal score.

However, business credit doesn't just happen automatically; it requires intentional building.

While everyone knows about personal credit scores, many are unfamiliar with business credit scores.

Some well-known examples include Dun & Bradstreet's PAYDEX, Experian's Intelliscore Plus, and FICO's SBSS score.

PAYDEX is rated on a scale from 1 to 100, and a score of 80 means bills are paid on time.

To exceed 80, payments must be made before the due date, which is quite different from personal scores.

Experian's Intelliscore Plus, in its previous version, also ranges from 1 to 100, with scores above 76 classified as low risk. The latest V3 version uses a range from 300 to 850.

FICO SBSS ranges from 0 to 300. For a long time, a score of 165 was the benchmark for pre-approval for SBA 7(a) small loans.

However, starting March 1, 2026, the SBA removed this score from the mandatory evaluation criteria for 7(a) small loans.

Instead, banks were instructed to use their own credit evaluation models as part of the general assessment process.

That said, SBSS hasn't disappeared. A verified model means that the stronger the record, the more favorable it is for any assessment.

So why is it necessary to build business credit separately? The first reason is to protect my personal credit.

Some business credit cards report monthly balances and payment histories to personal credit reports.

Capital One and Discover are commonly cited, although some Capital One cards are exceptions.

If you purchase inventory all at once and max out the limit with such cards, even if the business is doing well, your personal credit utilization can skyrocket.

The repercussions can directly affect home refinancing or auto loan interest rates.

In contrast, Chase, American Express, Citi, and Bank of America are known not to report business card usage to personal reports.

Of course, personal credit checks and personal guarantees are generally required during issuance.

The second reason is the weight of personal guarantees. According to small business credit reports, 59% of businesses with debt secured it through personal guarantees.

51% used business assets as collateral.

A personal guarantee means that if the business falters, I am responsible for my home and bank accounts.

Having a record for the business itself gives banks a basis to assess the store rather than just the owner.

The third reason was somewhat unexpected. Business credit reports do not receive FCRA protection like personal credit.

This means that for a subscription fee, clients or competitors can view our store's report.

An empty or incorrect report can become the first impression of the store. In a meeting to establish a relationship with a new wholesaler, that one page speaks first.

When I asked a friend who has been in accounting nearby for a long time, he said, "Most business owners only look for business credit when it's time to get a loan. By then, it's already too late."

So where should one start? First, legally separate the business as an LLC or corporation and obtain an EIN for free from the IRS website. It only takes a few minutes online.

Next, get a D-U-N-S number from Dun & Bradstreet.

Free applications can take up to 30 days, and it's wise to be cautious of places that charge for this number.

Also, make sure to align your business address, phone number, and bank account under the business name. If the name varies slightly across documents, records can become scattered.

Next is establishing Net 30 accounts. This involves receiving goods first and paying within 30 days, and this payment history is reported to credit agencies, building your score.

One important thing to check is whether the vendor actually reports to credit agencies. If they don't report, no matter how diligently you pay, it won't reflect on your score.

PAYDEX requires multiple payment records from various vendors to be calculated.

It's advisable to start transactions with two or three suppliers for necessary office supplies or packaging, and develop the habit of paying slightly before the due date when the bills arrive.

When both personal and business credit are solid in their respective places, it creates less anxiety, so remember this well.