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Starting Business Credit – Why Your Business Address Matters

Reviewed by Ty Crandall

November 15, 2023
starting business Credit Suite

Did you know that your business address matters when it comes to starting business credit?  Your address matters. And there are other things that can make a difference. Here’s how you can start off on the right foot when it comes to business credit.

Your Business Address, and 5 Other Things You Didn’t Know Make a Difference When Starting Business Credit

When you first start a business, you may not be thinking about anything other than how to pay for it  and how to get customers. Many businesses start small from home. They operate in either an extremely intimate area, or they work mostly online.  Social media-based businesses have exploded in recent years. 

That being the case, new business owners often simply use their residential address as their business address.  It’s the easiest thing to do, and makes sense after all. I mean, if you are running your business out of your house, why wouldn’t you use your home address? 

Looking into the future however, you are going to need to build business credit.  For that, your business needs its own address, separate from your personal address. 

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Why Is Starting Business Credit Important? 

If you have great personal credit, business credit probably never even crossed your mind.  You just figure you can get all the funding you need based on the merits of your personal credit score. If your personal score isn’t the best, you may have explored other options and realize that business credit is a thing. 

Here is what you may not know, either way.  You cannot just apply for credit in your business name and assume that any credit you get is business credit.  Unless you set up your business in a very specific way and follow a very intentional process, those accounts are going to report to your personal credit.  This is true even if you apply with your business name. 

Why does this matter?  There are a few reasons actually.  First, personal credit simply cannot handle the spending necessary to run a business.  You will either exceed your limits continually or consistently hover near them. Even if you pay off your cards each month, staying near limits can affect your score negatively.  It results in a high debt-to-credit ratio, and that will cause your personal score to drop.

Conversely, cards obtained on the merits of your business credit will usually have higher limits.  That means more spending power. Not only that, but if there is and issue with your business debt, your personal credit will be protected because those accounts will not be on your personal credit report.

How to Get a Business Address

Now that you know why you need business credit, you need to know how to get it.  Like I said, there is more to it than just applying for credit using your business name.  Your business has to be set up a certain way. You also have to be intentional about getting accounts that report to business credit rather than personal credit.

For your business to be set up in a way that is conducive to building business credit, it needs to be easily recognizable as a fundable entity separate from the owner.  One of the first steps toward accomplishing that is for the business to have an address different than the owner’s personal address.

The question that most business owners ask about this is, how do you get a business address that isn’t your home address if your business is in your house?  Well, the obvious first option is to get a P.O. Box. That works for some things, but some lenders want to see a physical address. 

Of course, if you are running a business online or from your home, you are wondering how you can do that.  The answer is a virtual office.

Info on 7 Vendors Webinar Check out our best webinar with its trustworthy list of seven high quality vendors to help you build business credit.

What is a Virtual Office and How Does it Work?

According to Investopedia, “A virtual office gives businesses a physical address and office-related services without the overhead of a long lease and administrative staff. With a virtual office, employees can work from anywhere but still have things like a mailing address, phone answering services, meeting rooms, and videoconferencing.”  

Basically, virtual offices operate as a single unit.  Sometimes there is a physical location that has meeting rooms and such available as needed. However, more often it is operated solely online with a physical mailing address and other services you can use, as mentioned above. These services are ideal for those that need a physical address but do not need an actual office. 

3 Stellar Options for Virtual Offices

If You think a virtual office space is best for your business, here are three top options to help get you started. 


Davinci offers a prime business address with options to hire a receptionist, book meeting space, and live chat.  Prices are variable. Call for a quote or go here to learn more. 

Alliance Virtual Offices

Alliance Virtual Offices offers physical address and mail services starting at $49, along with business phone numbers, live receptionist service and office space.  Go here to learn more.


In addition to virtual office services, Regus has options for meeting rooms and more.  Find out more here. 

What Else Matters: 5 Other Things You Didn’t Know Make a Difference When Starting Business Credit

Separating your business from yourself for the purpose of starting business credit takes more than having a separate business address. Here are some other steps that you must take to make your business appear fundable on its own to lenders. 

Startup Biz Credit Suite

You Need a Business Phone Number Before Starting Business Credit

This is for pretty much the same reason that you need a business address that is different from your own.  Your address and phone number are both identifying factors that point back to your personal credit report. If you associate them with your business, you run the risk of business accounts reporting on personal credit. 

Your business phone number should be toll-free, and it needs to be listed in the business directories.  You can handle this at: https://www.listyourself.net/ListYourself/

You Need a Professional Business Website Before Starting Business Credit

Think about it.  In today’s world, if you aren’t online do you really even exist?  The first place anyone looks for anything is online. Having a business website is a must.  You can’t just throw something together though. It is essential that the website be user friendly and well put together.  It is almost always worth it to pay a professional to handle this. Oh, and don’t use a free hosting service.

That does not look professional.  Pay for hosting through a service like GoDaddy.

You Need a Dedicated Business Email Address Before Starting Business Credit 

This goes along with the other separate business contact information.  Don’t use your personal email address as your business email. Also, make sure your business email has the same URL as your website.  A free email service such as Yahoo or Gmail will not serve you as well. 

Your Business Needs to Formally Incorporate Before Building Business Credit

If you operate as a sole proprietor or a partnership, there will never be enough separation between you and your business to build separate business credit.  You need to formally incorporate as either a corporation, an S-corp, or an LLC. Here is a little more information about each of these options.


 This is the most expensive option, but it also offers the most protection from liability. There is a double taxation caveat with this option that is a turn off for most. Owners pay tax at both the business level and the shareholder level. In some cases, this is the best option anyway. 


 S-Corps are very similar to corporations, but double taxation isn’t an issue. There are also limits on the number of shareholders allowed among other restrictions set forth by the IRS. 


 An LLC, or a limited liability corporation, is the least expensive option. It still offers some liability protection, and has fewer restrictions than an S-corp. 

Each of these options serves the purpose of further separating the business from the owner when you are looking to start a business credit profile. The option you choose should be the one that best suits your needs for tax purposes. 

You Need a Business Bank Account to Start Business Credit Building

Another common practice of small business owners is to use their personal bank account for business funds.  While in the beginning this seems like the best option simply because it is easy, it further mingles your personal information with your business information.  Not only that, but it makes separating business expenses from personal expenses at tax time very hard. 

You need a separate business account.  When it comes to starting business credit, this helps in two ways.  First, it helps to separate the business from the owner. Also, so lenders want to see a certain balance in a business bank account before approving credit.  

Other Things You Need to Know Before Starting Business Credit

In addition to the things mentioned above, there are a few other steps you need to take to set up your business for starting business credit. 

The EIN Wins in the Battle of EIN vs. SSN When Starting Business Credit

And EIN is the business equivalent of a social security number. If you use your SSN to apply for credit for your business, your personal credit will get involved. By using a unique identification number specifically for the business, you ensure that your business is separate from your SSN. You can get an EIN for free here

You Have to Have a D-U-N-S Number to Have Business Credit

Here’s why.  Dun & Bradstreet is the largest and most commonly used business credit reporting agency.  If you do no have a D-U-N-S number, you cannot have a business credit file with them. You definitely need a business credit profile with D & B.

Choose Creditors that Work with the SBFE

The SBFE is a not-for-profit entity that gathers data on small businesses from its members. The data is then used to compile comprehensive credit information. Lenders that are SBFE members have access to this information.  They use this information to make credit decisions.

The Small Business Finance Exchange does not lend money. It also does not create or distribute credit reports. What is does do is collect information from lender members on their borrowers.  That information is then passed to D&B and Equifax.

This means if you are doing business with SBFE members, you know your credit information is being reported, at least to those lenders that are members of the SBFE. Find out more about the SBFE here. 

Info on 7 Vendors Webinar Check out our best webinar with its trustworthy list of seven high quality vendors to help you build business credit.

Other Ways to Get Accounts Reporting To Your Business Credit Report

Once you have your business set up properly, you can start to build business credit.  If you do not already have strong business credit, you will have to start at the bottom credit tier, known as the vendor credit tier.  These are business credit cards for startups that will offer net terms on invoices without checking your credit. Then they will report your payments to the credit reporting agencies.  

However, they will often want to see an EIN, business bank account, or a listing in the business directories along with a certain amount of time in business or annual revenue.  This is just one reason why setting up your business properly is so important. 

After you get a few of these accounts reporting, you can apply for credit in the next tier, which is the retail credit tier.  These are cards that you can only use in the stores that issue them, like a Best Buy card or an Office Depot card.  

Once you have several of these accounts reporting positive payment history, you can apply for cards in the fleet credit tier.  Those are cards from companies that can only be used for fuel and auto repair and maintenance.  

Get enough cards from the fleet credit tier, and you can move on up to the cash credit tier.  These are the cards that do not have limits on where you can use them or what types of expenses you can use them to pay.  This is the top tier, and once you hit it you will see your business credit score start to grow like a snowball rolling downhill.  That is, of course, if you handle your credit responsibly.

Not Having a Business Address can Kill Your Chances of Starting Business Credit 

There is so much more to getting business credit than having a separate business address.  However, if you have everything you need and you do not have a business address, that lack could definitely throw a kink in the process. Remember, you don’t have to have a separate location, just a separate address. Then make sure everything else is set up to separate your business from yourself. 

After that, you can start building strong business credit. The funding you need to run and grow your business will be right there when you need it.  

About the author 

Faith Stewart

Faith has a BBA with a major in Accounting, and a combined 20 years of experience in the fields of finance and account.

Before switching to writing, she spent 10 years working in various areas of small business and personal finance and accounting, including working as a public auditor at BKD, LLP, Financial Director at Central Arkansas Development Council, and Commercial Credit Analyst at Farmer's Bank and Trust.

    1. Our research shows D&B wants a physical address, so they should accept a virtual address from Regus. A PO Box or a UPS box would not be accepted.

  1. How important is the “toll-free” when it comes to the business phone number? Does it need to be a land-line or will a smart line by go-daddy work? They have toll free options.

    1. Thank you for letting us know, we can look into it. My one concern is that we haven’t found that GoDaddy numbers are always able to be listed in the National 411 Directory.

  2. Our problem is government-related. What I mean is, to qualify for government contracts our only option at this time is to use our home address. This is because while registering with SAM, to qualify for the necessary CAGE number you must have a physical address and they do not accept P. O. boxes or virtual addresses as qualifiers. Even the ones that offer meeting space. I’m not sure if there are any exceptions. Any suggestions or experience with this?

    1. Hmm I wonder if they would accept coworking spaces? If they do, then you may be able to work with another company in your area in a similar predicament (I would ask around in the local Chamber of Commerce if I were you) as you may be able to come to an understanding where you would both benefit.

      I would hope that the government changes this, as the pandemic has made a lot of people work from home. It would be a shame to lose out on government work, or for the government to lose out on your talents and the talents of people like you, just for this. In case you haven’t yet, write to your local Congressperson about this, and maybe even the press. The government won’t make changes unless folks like you and me make a lot of noise.

      Thank you so much for such a fascinating and unique question!

    1. Hi!

      I have asked our crack team of Advisors and they say, “Most companies like Regus, Alliance, Davinci and VOIP companies normally don’t report to the business credit bureaus.”

      Thank you for asking such a great question.

  3. Does it has to be a virtual office? I already have Vonage for business phone line and my own customer service support. Can I just purchase the business address itself?

    1. I don’t see any reason why not. Just make sure the vendors, etc. will accept the address.

  4. What if you have another address that is different from your home address, but it is also residential? Would that be sufficient, or does it need to be a commercial address?

    1. If it’s a retail establishment (a store), then you’re going to need a commercial address — not just for business credit building, but potentially also to comply with zoning ordinances. If you’re operating straight off a computer, you should be fine. Happy entrepreneuring!

  5. Can you get business credit with using an physical address that has already been used for business credit?

    1. Thank you for your comment Jordan. It will be an issue if the business address is being used by another business to build business credit so lenders and creditors may deny you for credit. You may choose to use virtual office if having physical address is a challenge, Regus, Alliance, Opus & Davinchi are good options. Hope this helps.

  6. I am working with a company and that walks you through building business credit and they had me change my business address from virtual office to my home address stating lenders prefer home addresses over virtual offices Bc of scammers n fake business. Is this true.

    1. Hi Maurice, using a Virtual Office makes sense for most businesses because it is located in a physical building in your area. When you apply at a bank with a smaller lender they may want to see your personal address as well. When applying for a bank account you will need your physical address.

  7. Thanks so much for talking about how business credit can help you grow your business. My brother owns a business and it's growing to the point where he can't use his own money for things. We've been looking into business credit and what that means for his small company.

    1. We’re glad that we can help more entrepreneurs through our blogposts. You may also download our free business credit guide for step by step process on how to build business credit under your EIN.

    1. Hi Brandy, thank you for your comment. You might want to stay away from ipostal.com and PO Box addresses, lenders and credit issuers don’t see it as legitimate virtual office. We recommend, Regus, Opus, Davinci, and Alliance for virtual office.

  8. Hi my name is Annie an I have business net 30 accounts I'm nti guess using all my net 30 accts an main thing is my profile busdiness address is nt on dun an brad street my residential address an busdiness address is mixed with my personal information my score is a 74 my Experian is a 346 can you call me @ 872 639_6703

  9. It really helped when you elaborated on the importance of having a business bank account and credit. I spoke with my cousin about her upcoming project, and she sounded very excited about opening her own business. She'll definitely benefit from reading your intake on separating business expenses from her personal ones.

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