<PAGE>
 
                                 EXHIBIT 10.17
                                 -------------

First Amendment to Credit Agreement dated September 1, 1995 by and among Bush 
Industries, Inc., as Borrower, the Lenders party thereto from time to time, the 
Issuing Bank referred to therein, and Mellon Bank, N.A., as agent.
<PAGE>
 
                        FIRST AMENDMENT TO CREDIT AGREEMENT
                        -----------------------------------


          THIS FIRST AMENDMENT TO CREDIT AGREEMENT (this "Amendment"), dated as
of September 1, 1995, by and among BUSH INDUSTRIES, INC., a Delaware corporation
(the "Borrower"), the Lenders party to the Credit Agreement described below, the
Issuing Bank referred to in the Credit Agreement described below and MELLON
BANK, N.A., a national banking association, as agent for the Lenders (in such
capacity, together with its successors in such capacity, the "Agent").

                                   RECITALS:

          A. The Borrower, the Lenders, the Issuing Bank and the Agent are
parties to that certain Credit Agreement dated as of July 26, 1995 (the "Credit
Agreement").

          B. The parties desire to make certain amendments to the Credit
Agreement.

          NOW THEREFORE, in consideration of the premises and of the mutual
covenants herein contained and intending to be legally bound hereby, the parties
hereto agree as follows:

          Section 1.  Certain Definitions.  In addition to words and terms
          ---------   -------------------                                 
defined elsewhere in this Amendment, capitalized terms used in this Amendment
and not otherwise defined herein have the meaning set forth in the Credit
Agreement.

          Section 2.  Amendments to Credit Agreement.  The Credit Agreement is
          ---------   ------------------------------                          
hereby amended in the following respects:

          (a)  Definitions.  Section 1.01 of the Credit Agreement is hereby
               -----------                                                 
amended by adding the following definition after the definition of "Commitment
Percentage":

"'Consolidated Capitalization' at any time shall mean Consolidated Net Worth at
such time plus Consolidated Funded Debt (Net) at such time."

          (b)  Section 7.01(a).  Section 7.01(a) is hereby amended to read in
               ---------------                                               
its entirety as follows:

                  "(a)  Ratio of Consolidated Funded Debt (Net) to Consolidated
                        -------------------------------------------------------
          Capitalization. As of the last day of each fiscal quarter of each
          --------------
          Fiscal Year, the ratio of Consolidated Funded Debt (Net) as of the end
          of such fiscal quarter to Consolidated Capitalization as of the end of
          such fiscal quarter shall be not more than 0.49 to 1.00."
<PAGE>
 
          Section 3.  Representations and Warranties of the Borrower.  The
          ---------   ----------------------------------------------      
Borrower hereby represents and warrants to the Agent and each Lender as follows:

                  (a)  Power and Authorization.  The Borrower has full power and
                       -----------------------                                  
          authority to execute, deliver, and perform its obligations under and
          take all actions contemplated to be performed by it under, this
          Amendment and all such action has been duly and validly authorized by
          all necessary corporate proceedings on its part.

                  (b)  Execution and Binding Effect.  This Amendment has been
                       ----------------------------
          duly and validly executed and delivered by the Borrower. This
          Amendment constitutes the legal, valid and binding obligation of the
          Borrower enforceable against the Borrower in accordance with its
          terms, except as the enforceability hereof may be limited by
          bankruptcy, insolvency or other similar laws or general application
          affecting the enforcement of creditors' rights or by general
          principles of equity limiting the availability of equitable remedies.

          Section 4.  Miscellaneous.
          ---------   ------------- 

          (a)  Except as amended hereby, the provisions of the Credit Agreement
are hereby ratified and confirmed in all respects by the parties hereto and
shall remain in full force and effect as between such parties.

          (b)  This Amendment shall be deemed to be a contract under the laws of
the Commonwealth of Pennsylvania and for all purposes shall be construed in
accordance with and governed by the laws of such Commonwealth, without regard to
conflicts of law principles.

          (c)  This Amendment may be executed in as many counterparts as may be
deemed necessary and convenient and by the separate parties hereto on separate
counterparts, each of which when so executed and delivered shall be deemed to
constitute an original, but all such separate counterparts shall constitute but
one and the same instrument.

          IN WITNESS WHEREOF, the parties hereto by their officers hereunto duly
authorized have executed this Amendment as of the date and year first written
above.

                                                BUSH INDUSTRIES, INC.

                                                By: /s/ Neil Frederick
                                                    --------------------------

                                                Title: Treasurer
                                                       -----------------------

                                      -2-
<PAGE>
 
                                                MELLON BANK, N.A., individually
                                                   and as Agent

                                                By: /s/ Mike Anselmo
                                                    --------------------------

                                                Title: AVP
                                                       -----------------------


                                                BRANCH BANKING AND TRUST
                                                   COMPANY

                                                By: /s/ Hoyt Almond
                                                    --------------------------

                                                Title: S.V.P.
                                                       -----------------------


                                                THE CHASE MANHATTAN BANK, N.A.


                                                By: /s/ Fred Loder
                                                    --------------------------

                                                Title: VP
                                                       -----------------------


                                                CHEMICAL BANK


                                                By: /s/ Robert J. McArdle
                                                    -------------------------

                                                Title: Vice President
                                                       ----------------------

                                      -3-