Although personal and business credit scores are not built exactly the same way, you can think of your business as a teenager just starting out with no credit and needing to build it or to a young adult who is considering home financing and needs to improve their credit score.

In most cases it is important that small businesses have both good business credit as well as solid personal credit on the part of the owners. This is especially true when starting up your business because lenders will be relying more on your personal credit history considering the fact that you have no business credit history. However, even established businesses will find it necessary in some cases to provide the business owner's personal guarantees on some loans or credit cards.

Building business credit is very different from building personal credit. However, you may find that your personal credit may be linked in some ways. For example, the credit reporter Experian sells a business credit score that is based on both the risk of the business and the personal credit of the owner of the company.

Another difference is that you don't have the same credit protection laws with business credit that you do with personal credit. It may be difficult to make corrections later on, so be sure you know what you're doing as you start out so as not to make critical mistakes.

In order to establish business credit you will first want to set up a business structure. You want your business to be legitimate and stable. Having the right licenses, a listed phone number with your business name, etc. will make you look like a real company to business credit bureaus. You will need to set up some sort of entity whether it be a corporate structure or some other business structure in order to effectively build a business credit rating.

After setting up your structure, you can begin building a credit history by buying products and services from companies that will report your credit history to the major business credit reporting agencies such as Dunn & Bradstreet and Experian.

Another way that business credit scores differ from personal credit ratings is that unlike personal ratings where you can have a small income and still get a top FICO credit score, the best business credit scores are reserved for large stable businesses who earn several million dollars in sales a year and have 25-50 or more employees. However, don't let this discourage you. It is still possible for small businesses to build a decent business credit rating in order to gain borrowing power.

A few things you will want to watch out for:
 Don't try to "buy" good credit. Some companies will offer to "sell" trade references for a large sum of money. This is a scam and if the credit reporting agencies find out, they will purge those references.
 Don't spend large sums of money on a shelf corporation from a company that "guarantees" you will be able to use it to get loans. More often than not, the company won't have the kind of credit rating you'll need to be successful.
 Don't try to get business credit as a substitute for bad personal credit. If you have damaged personal credit, work on rebuilding it while you're building business credit.

In general, entrepreneurs are usually hard-working, creative and willing to get the job done. Fortunately for you, those are the same qualities that will help you through the process of building a credit history that will win you borrowing power for what you need.