How Business Credit Really Works for Contractors

Why Contractors Must Become Financially Resilient

Gerri starts with a truth most people don’t want to talk about:

“A construction champion is someone who is financially resilient. This industry has ups and downs, and cash flow problems can take out good companies.”

Construction is unpredictable. Jobs stretch out. Payments slow down. Materials spike. And while you may be great with tools or management, financial systems are a completely different skill set.

Most contractors only pay attention to credit when something goes wrong, like when a loan gets denied, a supplier freezes an account, or a big job gets delayed.

Gerri makes it clear: the time to build financial stability is when things are going well, not when it’s already too late.

Business Credit vs. Personal Credit (And Why Contractors Confuse the Two)

Most contractors live off personal credit, personal cards, personal guarantees, and personal exposure. But business credit is an entirely different world.

There are three major business credit bureaus:

• Dun & Bradstreet (DNB)

• Experian Business

• Equifax Business

  
  

Unlike personal credit, these bureaus don’t follow the same rules:

• No mandatory free reports

• No requirement to notify you of negative information

• No consistent reporting across lenders

  
  

This is why Gerri says:

“You could already have a business credit file, and you may not even know it.”

Even worse? Your business credit file could be mixed up with another contractor who has the same or similar business name. That can cost you bids, and you’d never know why.

The DUNS Number: Why It Exists and Why It Still Matters

Dun & Bradstreet assigns every business a DUNS Number, which acts like a business identifier. Even though government agencies have moved to a different system, suppliers, vendors, and many commercial partners still rely on the DUNS Number to:

• Match accounts

• Check credit

• Validate your business identity

  
  

If you’ve ever filled out a supplier credit application, you’ve probably seen a DUNS Number field, even if you didn’t understand what it meant.

Because contractors often share similar names (think “ABC Construction,” “Precision Builders,” “Elite Roofing”), having the wrong info tied to your business can destroy opportunities.

The Hidden Risk: Bad Data You Don’t Even Know About

Gerri shared a brutal example: Levi King, co-founder of Nav, once lost a massive commercial job because Dun & Bradstreet accidentally merged his business with another company that had the same name. That company had gone out of business and had terrible credit.

He had no idea until after he lost the contract. This happens more often than contractors realize. If your business name is common in your region, you may already be carrying someone else’s bad credit history.

Why Business Credit Feels “Hard” for Contractors

Contractors constantly say the same thing online:

“Business credit is confusing.”

“I don’t even know where to start.”

“This doesn’t make sense.”

Here’s why:

1. Reporting is inconsistent

A supplier might report to Experian but not to DNB. Or only report negative information. Or report only if you’re past due.

2. It’s expensive to check

Unlike personal credit, which is free everywhere, business credit reports can cost $100+.

3. No one teaches this

You don’t learn business credit in school. You learn it by doing or by making painful mistakes.

4. The system is unregulated

Personal credit is tightly regulated. Business credit has almost zero oversight.

The result? Contractors end up in a system they don’t understand, with rules that don’t make sense, trying to navigate information they can’t easily access.

How to Build Business Credit the Simple Way

Gerri breaks it down into the clearest version contractors will ever hear:

Step 1 — Get accounts that report to business credit agencies.

Examples that many contractors already use:

• Grainger

• Uline

• Industrial suppliers

• Local building suppliers with net-30 terms

  
  

Many of these report to at least one bureau.

Step 2 — Get a business credit card if your personal credit is decent.

Most business cards report to at least one bureau.

Step 3 — Pay on time, every time.

Just like personal credit, on-time payment history is the foundation of all business credit scoring.

Step 4 — Monitor your reports.

Check for:

• Mixed files

• Old business info

• Wrong addresses

• Negative items

• Accounts you don’t recognize

  
  

You can’t fix what you don’t see.

Why Contractors Should Check Other Companies’ Business Credit Too

This is one of the biggest “holy crap” realizations from the episode. Contractors lend money every day without realizing it. Any time you:

• Start a job

• Pay for materials

• Pay a crew

• Deliver work

• Submit an invoice

  
  

…you are extending credit to the customer.

Gerri shared an example where she personally lost $40,000 because she didn’t check a company’s credit before doing work for them. Contractors experience this every day:

• Slow-pay clients

• No-pay clients

• GCs who drag out payment terms

• Commercial customers who string you along

  
  

You can't check a homeowner’s personal credit, but you can check a business’s credit before you sign a contract. This single practice could save contractors millions across the industry.

The Truth About Personal Guarantees

Contractors sign personal guarantees all the time without understanding what they mean. A personal guarantee means:

If your business can’t pay, they can come after YOU personally.

Bank accounts, wages, personal assets, your home (depending on state laws). Gerri makes it clear:

• Early on, personal guarantees are normal.

• But as your business grows, you want to move away from them.

• Strong business credit is what helps you do that.

  
  

Personal guarantees can pierce the corporate shield you've built with an LLC or corporation, exposing you to risk you may not be ready for.

What Gerri Recommends for Contractors

Gerri works with Nav, a platform that helps contractors:

• See their business and personal credit in one place

• Fix errors

• Monitor changes

• Build business credit with a reliable reporting trade line

• Learn exactly which actions help or hurt their business credit

  
  

She also provides a free step-by-step guide to building business credit the right way.

Episode Takeaways

• Most contractors already have a business credit file; they just don’t know it.

• Bad information can cost you work, opportunities, and partnerships.

• You can build business credit faster than you think.

• You should be checking the credit of companies you work with.

• Personal guarantees create massive hidden risk.

• Business credit protects contractors, stabilizes cash flow, and helps you move into bigger opportunities.

  
  

About Gerri Detweiler

Gerri Detweiler is a nationally recognized expert on credit, financing, and small business financial systems. She’s spent decades helping small business owners navigate credit, avoid pitfalls, and build financially resilient companies. Her work with Nav gives contractors the tools and visibility they need to build strong business credit and protect their financial future.

How BuilderComs Fits In

Every contractor knows communication issues cause more damage than bad credit ever will. Missed messages, unclear updates, lost information, or “I never got that text” moments can cost you money, timelines, and reputation.

That’s why BuilderComs exists.

BuilderComs helps construction teams stay aligned, communicate clearly, and protect projects from miscommunication that costs time and money.

If you’re ready to streamline communication and build a healthier business on every job:

www.buildercoms.com

How Business Credit Really Works for Contractors: What You’re Missing (and Why It Matters)