Starting a business in Connecticut can be exciting—but to thrive long term, local entrepreneurs need more than just a great idea. A crucial step in setting your business up for success is building solid business credit. Good business credit can help you qualify for loans, secure better vendor terms, and protect your personal finances.
Here are the essential steps to building business credit the right way:
Establish a Legal Business Entity
To begin separating your personal and business finances, you’ll need to create a formal business structure:
- Form an LLC or Corporation: Register your business with the State of Connecticut. An LLC (Limited Liability Company) or corporation provides legal separation between you and your business, which is critical for building a separate credit profile.
- Get an EIN: An Employer Identification Number (EIN) from the IRS acts like a Social Security number for your business. You’ll need it to open accounts and file taxes.
Tip: If you’re not sure which structure is best for you, consider speaking with a small business advisor or accountant.
Open a Business Banking Account
Once you have your LLC and EIN, open a business checking account. This is where Union Savings Bank can help.
- Separate Finances: A dedicated business account ensures your business income and expenses don’t mix with personal funds.
- Build Credibility: Lenders and vendors see a business account as a sign that you’re running a legitimate operation.
USB’s Business Banking team offer a range of checking and savings options tailored for local entrepreneurs.
Apply for a DUNS Number
A DUNS Number (Data Universal Numbering System) from Dun & Bradstreet is like a credit file number for your business.
- Why It Matters: Many suppliers, vendors, and lenders use DUNS to check your credit before doing business with you.
- How to Get One: You can apply for free at Dun & Bradstreet’s website.
Use a Business Credit Card Responsibly
A business credit card can be a powerful tool to build credit, as long as you use it wisely:
- Choose a Card That Reports to Business Credit Bureaus: Not all cards do. Look for one that reports to Experian Business, Equifax Business, or Dun & Bradstreet.
- Keep Balances Low: Use the card for regular expenses and pay it off in full each month to avoid interest and show responsible usage.
Need help finding the right card? Union Savings Bank offers credit card options for your business*.
Establish Trade Lines with Vendors
If you work with suppliers, ask if they report payments to business credit bureaus.
- Net-30 Accounts: These are vendor accounts that let you pay invoices within 30 days. Paying them on time helps establish a positive payment history.
- Start Small: Even a few positive trade lines can make a big difference over time.
Monitor Your Business Credit
Once you’ve started building your profile, it’s important to monitor your progress.
- Check Reports Regularly: You can view your business credit reports through services like Nav, Dun & Bradstreet, or Experian.
- Dispute Inaccuracies: Just like with personal credit, errors can happen. Stay on top of your report and address any discrepancies quickly.
Start Building with Confidence
Business credit isn’t built overnight—but with the right steps and financial tools, you’ll lay a strong foundation. Whether you’re launching your first venture or growing an existing business, Union Savings Bank is here to support Connecticut’s entrepreneurs with trusted business banking solutions, local guidance, and resources that make a difference.
Let’s build your business together. Visit your local USB branch or explore our business banking services to get started.
*Subject to credit approval.
