Simple ways to build business credit and a healthy financial routine

When your business has an opportunity to grow—or faces a cash crunch—the last thing you want to worry about is whether your credit is good enough to help you get funding. That’s why you want to build business credit before you need it. 

In James Clear’s Atomic Habits, he explains how to form tiny habits that get big results when compounded over the long term. He argues that consistent 1% improvement is better than the cycle of sprinting and burning out, and that these small wins eventually lead to exponential growth. 

Here we’ve used Clear’s four pillars of habit formation: make it obvious, make it attractive, make it easy, and make it satisfying, and applied them to building business credit. 

What are the initial steps to build credit for a new business?

Before we dive into specific habits, let’s quickly review the basic steps of establishing business credit. 

There are a few foundational steps that are helpful to check off your to do list:

• Choose your business name, address and phone number.
• Register your business with the state (set up a legal entity such as a limited liability company or corporation; or, if you operate as sole proprietor, file a DBA or fictitious business name).
• Get an Employer Identification Number (EIN) from the IRS
• Get a DUNS number from Dun & Bradstreet
• Get accounts that report to business credit bureaus (trade credit or a business line of credit)
• Establish an on-time payment history by always paying on or before the due date

Make it obvious: Keep credit building front and center

How many times have you intended to do something, but simply forgotten? 

When it comes specifically to building business credit, here are ways to get started and stick with it. 

1. Make time

Block out time on your calendar each week to take one step toward building credit. For most small business owners 10—15 minutes a week will be enough time to check your credit and take one step toward building stronger credit. Once you’ve established a strong credit history, you can move to a biweekly or monthly schedule. 

Take one small time wasting activity and replace that time with “business financial wellness” time. When you go to do the old task, simply replace the action with checking in on your business credit.

“I check on my business finances monthly by outlining every line item and its due date,” says Omolola Taiwo, CEO of Omi Wellness & Counseling, PLLC, a virtual mental health therapy practice. We specialize in integrative mental health and trauma informed care for adults, teens, and couples. “I also budget bi weekly to better manage cash flow,” she says. 

2. Set reminders 

Checking your business credit scores takes 2-5 minutes, especially when you’re using a service like Nav to keep tabs on your credit. Set a calendar block for 5 minutes every week on a day of your choice to check in on your score.

Some entrepreneurs prefer paper reminders. If that describes you, try putting a post it note somewhere you will see it. If you use a physical planner, for example, you can put a post-it note on the same day every week to remind yourself to do something for your business finances.

3. Stack your check-in time

According to Clear, habit stacking is a great way to remember to do certain things. For example, if you review your LinkedIn account once a week you can plan to check your credit after you do that. 

4. Block social media or other distractions

For many entrepreneurs, social media is a double-edged sword. It can be incredibly beneficial to growing a community, and also a vice that steals time away. But maybe you have another app that’s particularly distracting — what’s your most-used one? 

Download an app like Opal to block your distractions. Schedule time on social media instead of wasting it. 

5. Check alerts

Credit alerts are an important way to make Try turning on notifications. You might want to pair this with turning off notifications for other apps that are either distracting, or that you don’t use. That way, you only get reminders for your top priorities.

This is another great way to engage in habit stacking. If you have a time where you check in on your personal credit score, for example, simply remember to check your business credit score right after. Or, if you’re checking your personal finances, check your business finances right after.

Make it attractive: How to approach business credit building

Do you dread dealing with your business finances? Does thinking about looking at your credit card statements make you want to crawl into a hole? 

Find a way to reframe that by pairing your new habit with something you enjoy.

7. Reward yourself

If dealing with your finances is hard, think about a healthy way to reward yourself when you reach a specific goal, whether that’s a small piece of chocolate or watching an episode of your favorite show when your books are balanced. 

You can save a bigger reward for when you reach a bigger goal. Let’s say you get your company’s credit score to a certain level. You could then reward yourself with a weekend away. Cash in credit card points and it won’t even cost you anything!

Read: What Is a Good Business Credit Score

8. Look for money-saving opportunities

Reviewing your financial transactions and cash flow gives you an opportunity to think about how you are spending your money. Are there business expenses you can cut? (Just as importantly, are you using those everyday expenses to build your business credit profile?) 

Or are there areas where your business needs to make a bigger investment? Think of this review as an opportunity to save money and spend smarter. 

By doing a regular financial review, Taiwo has discovered that “I’ve often overlooked the opportunity to save more.”

13. Celebrate progress

Keep track of your credit scores. (Nav makes that easy). Every month that you make progress, celebrate your win in some small way. 

If you have a business mentor or coach, celebrate an improvement in your creditworthiness with them. Otherwise, share it with a trusted friend or business associate who understands why it matters. 

14. Remind yourself of your why

There are good reasons to build credit:

• Qualify for certain small business loans
• Get better supplier terms
• Reduce insurance costs
• Lower interest rates
• Get potential partnerships

Some of the best loans, including certain bank loans and Small Business Administration (SBA)-guaranteed loans go to business owners with a strong personal credit history and a solid business credit file. Taking the time to build credit can help you get there. 

For some people, remembering their “why” is a key part of helping them stay motivated and on track. 

Make it easy: Best strategies for improving your company’s business credit score easily

Building business credit doesn’t have to be difficult. Make it easier for yourself to check in with these simple steps.

16. Set it where you can see it

If you monitor your credit (like with Nav), put it on your home page, so when you open your internet browser, you’ll see your business’s financial health.

If you use an app instead, put it next to a favorite app like Instagram or Candy Crush so you’ll be reminded to open it. 

Eric Tarrant is the owner of Pro Ceramic LLC, a mobile detailing service and e-commerce store for detailing products. He stays on top of his financial goals daily, using Nav, Google Sheets, and PayPal. It helps him remember a rule he’s established for his business: “Don’t go into debt for anything that can’t create you money or income.”

17. Batch your bills

Batching is a really effective way to get things done efficiently. Why not apply it to business finances too? If you’re focusing on paying all your bills faster, instead of fragmenting your attention in an effort to pay them all as they arise, try moving all your due dates to the same day. Then, batch pay.

18. Automate payments

Automate your payments where you can. Payment history is the most important factor when it comes to building good business credit scores. Late payments will set you back in your effort to build a good business credit history so set up systems to pay on time. 

Most credit cards and vendors will allow you to set up automatic payments, ensuring that you never have to worry about missing a due date. Just make sure you also set up alerts for your business bank account so you don’t over-automate and end up with overdrafts.

19. Pay your credit card every week

If you’re worried about debt, pay your credit card more frequently. Set a day—Friday or Monday, for example—to pay as much of your statement balance off as possible. This can also help build strong business credit by reducing credit utilization. (It also helps with that all-important on-time repayment history.) 

20. Set your bills to be paid with your business credit card

If you have invoices or other bills that you pay via ACH, cash, PayPal, or something similar, find out whether you can change your method of payment to your business credit card without incurring an additional fee. This way, your everyday expenses help you build business credit. Pair this with one of the habits about paying bills regularly to make sure you stay on top of your credit card expenses.

21. Ask one vendor to report

You’ll need to get at least two tradelines to establish business credit. Instead of trying to reach out to all your vendors and suppliers at once to ask them to report, just reach out to one. Getting one done could have a snowball effect, making it easier to reach out to the rest.

Make it satisfying: Business credit building ideas

According to Clear, making a habit last long term is about making it satisfying. If you want to keep engaging in the habit, then it starts to become second nature. Here are a few ways to make business credit building satisfying.

22. Mark how many days or weeks in a row that you’ve checked in

Check off each day or week that you’ve checked your business credit reports, or done something else for your business credit, on a wall calendar. If, for example, Mondays are your business credit days, then you’ll see a line of checked off Mondays at the end of the month. It can be satisfying!

Keeping a dry-erase board in her office with her financial goals spelled out helps Cassandra Hill stay on track. She’s CEO of Holistic Living Consulting, a company that facilitates the emotional and mental well-being of Black women entrepreneurs while empowering them to achieve financial stability. 

“Seeing the goals daily helps with execution,” she says. 

23. Pair something that makes you happy with business finance days

In Effortless, Greg McKeown writes that he and his wife disliked doing their finances, so they paired them with chocolate covered almonds in order to make the task fun. 

You can do something similar for yourself. Choose perks that make you happy, whether it be chocolate almonds, a special cup of tea or coffee, or your favorite music, and pair it with your business finance tasks. Soon enough, you’ll look forward to checking in on your finances and business credit, and that can only be a good thing.

Last word on building business credit habits

For many people, small business owners included, tasks like small business credit, finances, and taxes can feel like a chore that gets pushed off until it can’t be delayed any longer. However, financial health is crucial to keeping the dream alive. 

“Finances are the lifeline of any business,” Hill points out. “As an effective CEO, it’s necessary to manage your money well so you can operate in excellence.”

If you want to start making your business credit a priority, start small with manageable goals and processes. Who knows, maybe finances could even become fun!