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How to Improve Your Business Credit Score

Whether you need a business credit card to cover everyday expenses or a loan to expand operations, your business credit score can help you get access to the capital you need. Lenders may use business credit scores to determine whether to provide funding, and investors can use them to screen potential opportunities. Potential customers, suppliers, and other companies may even pull your business credit to ensure your company is financially sound before entering into a contract or trade agreement with you.

According to a white paper by VISA, most lenders consider businesses with a credit score of 80 or above to be low risk. If your business credit score isn't quite there yet, here are a few steps you can take to improve it.

 

Review your business credit regularly

Your business credit report may contain errors – such as accounts that belong to another company or an incorrect industry classification code1 – that negatively impact your score.

That's why it's important to review your business credit report regularly. You can order your report from each of the three major business credit reporting agencies at:

If you find any errors, each agency has a dispute resolution process you can follow to request a correction. Here's where you can find those instructions:

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Before you open a new trade account, call the credit department to confirm that it will show up on your business credit report.

 

Establish accounts with companies that report trades

The VISA white paper also reported that one of the main influences on your business credit score is your credit history, including your payment habits.

Unfortunately, many vendors don't report to the business credit rating agencies at all. That means your history of on-time payments may be doing nothing to help your business credit score.

To ensure your payment history counts, establish trade accounts with companies that report to one of the three agencies listed above.8 Before you open an account, call the credit department and ask for confirmation that it will show up on your business credit report.

One word of caution: Don't try to open several accounts at one time. Some credit scoring models take into account the number and frequency of inquiries on your account.9 Applying for several new credit lines or loans within a short period signals to the credit bureaus that you're having financial difficulties, which can lower your business credit score.

 

Pay your bills on time

Since payment history plays a major role in your business credit score, be sure to make regular, on-time payments on all your accounts – even those that don't report to the credit bureaus.

Collections, liens, and other derogatory public records can lower your business credit score and remain on your business credit report for anywhere from 36 months to nearly ten years.10 To ensure you don't miss a deadline, automate payments or set reminders to pay all loans, utilities, credit accounts, and tax obligations.

Your business credit score is an asset that can help you access the capital you need to fund operations and grow. Familiarize yourself with your business credit report, check it regularly, and take steps to improve your score. It may take some time to see a noticeable improvement, but the effort will be worth it if you qualify for more favorable terms from lenders and vendors in the future.

Important disclosure information

This content is general in nature and does not constitute legal, tax, accounting, financial or investment advice. You are encouraged to consult with competent legal, tax, accounting, financial or investment professionals based on your specific circumstances. We do not make any warranties as to accuracy or completeness of this information, do not endorse any third-party companies, products, or services described here, and take no liability for your use of this information.

  1. Levi King, “Are You Hurting Your Company's Reputation Without Knowing It?" Forbes. Published December 5, 2019, accessed January 10, 2021. Back
  2. Dun & Bradstreet, "CreditSignal," accessed January 14, 2021. Back
  3. Experian, "Do You Know Your Business Credit Score?" accessed January 14, 2021. Back
  4. Equifax, "Business Credit Report for Small Business ," accessed Contently 3 January 14, 2021. Back
  5. Dun & Bradstreet, “Service & Support," accessed January 9, 2021. Back
  6. Experian, “Correcting Business Credit Report Information," accessed January 9, 2021. Back
  7. Equifax, “Small Business FAQs," accessed January 9, 2021. Back
  8. TRUiC, “Net 30 Vendors to Build Business Credit," updated November 5, 2020, accessed January 14, 2021. Back
  9. Experian, “Why Is My Business Credit So Low?" Accessed January 10, 2021. Back
  10. Experian, “How Long Data Stays on a Business Credit Report," accessed January 14, 2021. Back