In plain English
It is built from accounts held in the business's name that report payment history: trade accounts, cards, equipment finance, lines of credit.
Early on, most lenders still look at the owner's personal credit as well. Business credit does not replace that overnight. It accumulates.
Example
Three reporting supplier accounts paid on time for a year give a bank something to underwrite besides your personal score.
Why it matters
It determines how much inventory you can control with money that is not yours.
COMMON MISTAKEOpening accounts with suppliers who do not report anything, then wondering why no history exists.