How to Build Credit as a Freight Broker

May 13, 2025

How to Build Credit as a Freight Broker

You may have countless loads to transport, but without carriers willing to move them, your business simply cannot function.

Understanding how to build credit as a freight broker is crucial for success in this competitive industry. Without strong credit, carriers are hesitant to accept your loads, no matter how promising the job looks. That’s why building a solid credit profile early is critical when starting a freight brokerage.

In this guide, we’ll cover six ways to build a good credit score so carriers trust you and are willing to haul your freight. Let’s get right into it.

6 Ways to Build Credit as a Freight Broker

A strong business credit profile signals reliability and professionalism, making your brokerage more appealing. So, follow these practical steps to strengthen your freight brokerage’s credit profile and build trust in the industry.

1. Set up a legal business entity

Setting up a legal business entity (like an LLC or corporation) separates your personal and business finances, allowing you to build a business credit profile that’s independent of your personal credit.

This is important because when deciding whether to work with you, lenders, carriers, and factoring companies assess your business entity’s credit history, not yours.

Not sure how to set up a legally compliant freight brokerage? Sign up for our 90-Day Freight Broker Course to receive detailed guidance with the convenience of learning from your own home.

2. Pay carriers and partners on time

There are several bills freight brokers need to pay, including carrier payments, insurance premiums, and equipment leases.

Major credit bureaus (Ansonia, Dun & Bradstreet, etc) track your payment history by collecting data from vendors and factoring companies. If you miss or delay payments, it can hurt your credit score and damage your reputation, causing carriers to see you as a high-risk broker.

To stay on track, use accounting software to set payment reminders or integrate transport management systems like AscendTMS for automated recurring payments.

3. Consider using personal guarantees

For new freight brokers without established business credit, personal guarantees can provide a valuable starting point. They show carriers and factoring companies that you’re serious and willing to back your business with your own credit. While this can fast-track growth, it’s important to use personal guarantees strategically.

Here are some ways to use this approach:

Set a limit on the amount you’re willing to guarantee.
Add an end date, such as removing the guarantee after 12–24 months of strong payment history.
Always document the terms clearly with proper legal agreements.

Note that personal guarantees are not sustainable for long-term success. Have a plan to transition from personal guarantees as your business credit score improves.

4. Reach out to factoring companies

Factoring can be a lifeline for new freight brokers who need cash flow to pay carriers and vendors on time. Factoring companies give you immediate cash advances upfront and collect payment from your customers later. This helps prevent late payments and protects your credit history.

But as a new broker with little to no business credit, getting factoring companies to trust you can be challenging. That’s where personal guarantees come in.

If you’ve been using your personal credit strategically, you’ve built a record of reliability. This can then be a foundation that shows factoring companies you’re serious and dependable, even if your brokerage is new.

5. Reduce debt and avoid frequent credit inquiries

Accumulating high amounts of debt increases your credit utilization ratio, signaling that you’re overextended and may be a risky borrower.

Additionally, each time you apply for credit, a “hard inquiry” appears on your credit report. Frequent credit inquiries are a red flag that you might be in financial trouble and are trying to access too much credit at once.

Both can affect your credit score negatively, so consider these strategies to maintain strong credit:

Pay off outstanding debt, if any. Try paying off higher-interest debts first to save on overall interest.
Maintain a credit utilization ratio of 30%, which is the general rule.
Use automation to ensure that ongoing debts or credit card balances are paid in a timely manner.
Space out your credit inquiries.
Use business credit cards specifically designed for credit building.
Negotiate (or renegotiate) with creditors to lower your interest rate and/or extend your payment terms.

Reducing unnecessary debts and minimizing credit inquiries can lead to good credit ratings and make your brokerage more appealing to lenders and business partners.

6. Collect references from carriers

When you work with carriers, you establish a track record of paying on time. This can be reported to credit bureaus or used as part of your business credit profile. These references essentially act as proof of your financial health and general reliability.

Sharing these with potential partners or factoring companies strengthens your credibility, helping you secure more loads and build a stronger credit profile over time.

The Impact of Credit Scores on Your Freight Brokerage

Freight broker credit scores typically range from 0 to 100 and are classified based on risk levels. Higher scores indicate lower risk when working with your brokerage.

86-100: Low risk
70-86: Medium risk
0-69: High risk

Here’s how a good credit score transforms your business beyond simply booking loads:

Financing becomes more accessible, with better terms for loans, credit lines, or business credit cards to support expansion.
Trust grows among shippers and carriers, as your score reflects financial responsibility and strengthens partnerships.
Negotiation leverage increases, enabling you to secure improved rates or terms with suppliers and financial institutions.
Opportunities expand with larger clients, who often require partners with proven financial stability for high-value contracts.

FAQs

1. What is a good credit score for a freight broker?

A score of 86 or higher is considered low risk and ideal. Scores between 70 and 86 fall into the medium-risk category, and anything below 70 is considered high-risk. The higher your credit score, the more likely carriers and factoring companies will trust you.

2. How do you find your credit score as a freight broker?

You can check your broker credit score through commercial credit bureaus like Ansonia, TransCredit, or Dun & Bradstreet. These platforms provide access to your business credit report, including payment history, credit utilization, and any public records related to your business. You may need to sign up for an account and pay a fee to access the full report.

3. What should I consider when choosing a freight factoring company?

Consider the following factors:

The factoring fees and rates
The company’s reputation in the industry
Their funding speed
Customer service
The percentage of the invoice that they advance
Contract terms

Final Thoughts

At the end of the day, carriers want to know you can pay them, and having a strong credit profile gives them the confidence to work with you. That’s why building credit early is one of the most important steps in starting your freight broker business.

That said, a great credit score is just one piece of the puzzle. Running a successful freight brokerage also means building carrier relationships, managing operations, handling compliance, and understanding how the industry works from the ground up.

If you’re ready to move from startup to success, our 90-Day Freight Broker Course walks you through every step. Sign up to get started today.

Sources: