Running your own business is one of the most exciting and at the same time challenging ways one can choose to make a living.
It’s a lifestyle.
The concept of building something out of nothing is an accomplishment anyone would be proud of.
As a small business owner, you have to wear many hats.
With all the different tasks on your to-do list, how do you prioritize what’s most important?
And how do you know if you’re right?
One of the most important items that should be on the top of your to-do list is establishing a solid business credit score.
It goes without saying that in order to run and grow a sustainable business, you need money.
However, many business owners fail to devote enough attention to the most basic components of securing affordable capital - business credit score.
In fact, a study done by The Small Business American Dream Gap Report indicated that 45% of small business owners don’t know they had a business credit score and as high as 72% didn’t know where to find information about it!
Same study found that small business owners who understand their business credit scores were 41% more likely to get approved for a loan.
It’s important to remember that unless you are proactive in establishing and monitoring your business credit history and scores, most lenders and vendors will only report to the agencies if something goes wrong.
Basically, unless you act first, and have your lenders/vendors/suppliers and others report your timely payments as well as good and responsible behavior, you risk your credit history and score to be based only on negative information.
Use tools like NAV's Business Launcher to stay on top of your business credit from the start.
A business credit score is more than just a representation of your company’s financial strength.
In many ways, it is a foreshadow to your success or failure.
Below you’ll find a comprehensive guide to everything you need to know about business credit so you can take advantage of opportunities available to you and be able to secure working capital at low rates, and take your business to new heights.
We’re going to dig deep into everything there is to know about business credit score, but feel free to jump to any section that interests you:
What is Business Credit Score
Though there are some differences, a business credit score can be thought of very similarly to your personal credit score.
In the most basic sense, it is a number that ranges from 1 to 100 that represents how reliable your business is in regards to paying off its debts.
As is true with all sorts of investment, lenders and creditors aim to minimize risk when giving out loans.
Because they don’t know you on a personal level, and even if they did, they have to rely on something to determine what that risk may be.
That “something” is your business credit score.
There are many factors that go into the score which are discussed later in this article.
Because your business credit score is a reflection of your financial habits and reputation in general, it’s crucial you understand what it is and how it affects your business.
Your business credit score, in many ways, is akin to your reputation.
Just as how your personal credit score is born the moment you begin a job or apply for a credit card, your business credit score is born the minute you legally form a business.
And the same way your personal credit report indicates your ability to pay back a debt, the same is true for businesses.
Unlike your personal credit score, your business credit report is accessible by the public.
That means, for a small fee, investors, banks, lenders, and competitors can access your credit report at any time without your permission. And as can you to others.
With that in mind, you’ll want to make sure it’s accurate and reflects your business and the reputation you wish to uphold.
There are other differences as well.
Business credit scores are ranged differently.
Your personal credit score falls anywhere between 300-850, whereas, business credit scores are on a 1-100 range with 75 and higher considered excellent.
They’re also determined differently.
In fact, each of the 3 main credit reporting bureaus, Experian, Equifax and Dun & Bradstreet, have its own method for calculating scores.
FICO SBSS Score
Every business also has a score developed by the FICO Liquid Credit Small Business Scoring Service (FICO SBSS score).
It ranks small businesses in order by their likelihood of making on-time payments based on their personal and business credit history along with other data points.
Until recently, this has been a score many business owners have been unaware of because it’s been hard to get it and banks are not required to disclose they use the FICO® SBSS℠ score
However, it’s a score every business owner should know as more and more lenders use it to help them make faster and more accurate decisions.
A small business must score at least 140 on a scale of 0-300 in order to pass the pre-screening process the SBA uses for it’s most popular loan SBA 7(a).
In a business credit score, FICO takes 5 factors into account:
- Amounts owed
- New credit
- Length of credit history
- Credit mix
- Payment history
Business owners are not protected by the Fair Credit Reporting Act (FCRA). As a result, your SBSS score could be the reason you’re denied of capital and lenders are not obligated to give you a reason why.
Learning how to check business credit and the best steps to building business credit is crucial for the success of your business.
Why Your Personal Credit Score Matters
Although it’s best practice to keep personal credit and business credit entirely separate, there remains an important connection between the two.
The catch-22 new businesses find themselves in is: you need credit relationships to build your credit history, but you need a solid credit history to receive any credit.
This is where your personal credit history comes into play.
If its a newly founded business, it’s obvious you won’t have any prior business history.
As an alternative, lenders will look directly at your personal credit history to evaluate your trustworthiness.
If they can see you’ve handled personal money responsibly, you’re more likely to follow the same suit when borrowing funds for your business.
The same is applied to existing businesses as well.
Your personal credit history will help your business obtain working capital at a lower rates and therefore help you generate higher profits.
Why is Business Credit Score Important
The requirements needed in obtaining the financial capital to run and grow a sustainable business are too often dismissed.
The Small Business American Dream Gap Report found that nearly 30% of small businesses have found it harder to reduce operating costs now than ever before with 20% considering shutting down because of a lack of growth or cash.
These types of struggles, coupled with unforeseen expenses and the inability to prepare for such has led 53% of small businesses to apply for working capital loans or business line of credit.
But to their dismay, many faced rejections for credit lines and loans.
In fact, nearly a quarter of business owners didn’t know why they were denied, resorting to personal savings and credit cards which puts them at considerable risk.
Despite the wide variety of financing options, obtaining capital is becoming harder and harder with many small business owners not paying attention to the crucial dots of a successful business.
That connecting dot is your business credit score.
The same Nav survey revealed that failure in understanding their business credit score is the main reason small businesses couldn’t obtain bank loans.
Nearly 45% of entrepreneurs don’t know they even had a business credit score and a high 72% don’t know where to find it.
But making financial and lending decisions doesn’t have to be so confusing or difficult.
In every life cycle of a small business, regardless of the stage or industry, there is a moment they need a little help to survive, maintain or grow.
It could be that you need to stay afloat until your next “business season” or it could be that you need to invest in new products or services.
Whatever situation it may be, you need money.
And to receive money at reasonable rates, you need a good business credit score.
The Benefits of Having a Good Business Credit Score
There are a variety of benefits a good business credit score can reap on your business.
Regardless of the industry you’re in, you need working capital to pay for business expenses such as:
- Leases, office space and utilities
- Retail space
- Website and marketing
- Equipment, maintenance and updates
- Permits, licenses and dues
- So much more
Having a good business credit score will make it much easier to obtain low interest capital to cover these expenses when needed.
In addition to immediate cash, it actually saves you money in the long term.
Research by Asset Funders indicates that individuals with a bad business credit score end up paying almost $200,000 more for financial products and services over their lifetime.
Additionally, lenders typically offer better interest rates to those with good credit score.
A good credit score can also help you qualify for lower insurance premiums.
Limit Personal Liability.
Although personal credit and business credit are intertwined to a degree, keeping them separate reduces your personal liability and protects your personal assets.
Keeps You Ahead of Competition.
Because anyone can access your credit report, understanding your score ensures you take the proper steps to build and maintain the reputation you desire.
It can also increase credit capacity which gives you more wiggle room for investment.
Gives You a Peace of Mind.
With a good credit score you can make decisions with confidence knowing you can get the money you need, when you need it.
That not only reduces stress on your personal life but also enables you to invest more time on the business instead of in the business.
According to the Small Business Administration, nearly 50% of new business fail in the first two years.
Though there are myriad factors that contribute to the success or failure of a business, a strong business credit report is one of the strongest determining factor of success or failure.
What Factors Impact Your Business Credit Score
Like your personal credit score, there are many different factors that go into your business credit score.
There are 3 main credit bureaus in addition to FICO Liquid Credit Small Business Scoring Service (FICO SBSS score) and all of them calculate your business credit score differently.
For that reason alone, it’s important you become well versed in your business credit reports.
Some factors you need to consider include public records, bankruptcy history, your personal credit score, your company size and your industry’s inherent risk level.
The list is by no means exhaustive but some of the more important factors are:
- Credit Utilization Ratio: how much of the debt you are allowed to use is being used. It is best to keep it under 20%.
- Payment History: do you pay your debts on time? This can be broken down even further into trade payment history such as payments to suppliers or commercial financial payment history such as payments on business loans, equipment leases, etc.
- Length Of Credit History: how long has your business had credit?
- Legal Issues: do you have any past or outstanding lawsuits, bankruptcies, liens or court judgments?
- Collections: do you have any overdue accounts that have gone to collections?
As you can see, there are so many factors that go into determining your credit score.
Even details about your company such as high performing sales and profit can affect your standing.
There are also more obscure factors such as location and even local policy that can influence a credit score.
For those reasons alone, it’s important every business owner understands what goes into their businesses’ financial reputation.
Using a variety of public records, credit bureaus are able to open files on all new businesses and you should be aware that they will continue to track your company throughout its life.
Top 7 Ways to Establish a Good Business Credit Score
It’s inevitable that as a small business owner, you’ll wind up making mistakes along your journey.
Though mistakes are good learning opportunities, it’s important you mitigate the number of mistakes it comes to your business’s fiscal plan.
Gerri Detweiler at Credit Karma has noticed “a common mistake” among business owners in “assuming that as long as you pay your bills on time, your business credit is fine”.
The reality is far from being that simple.
In fact, there are a variety of ways you can build your small business credit.
1. Form a Corporation or LLC
When launching a business, there are a variety of options you have to structure your business such as sole proprietorship, partnership, corporation or limited liability company.
Your choice of business structure impacts every facet of your business, from how you file and pay your taxes to how you build business credit for your business.
It especially affects your financial reputation as it determines whether it’s credited to you personally, your business or both.
Choosing to structure your business as a corporation or LLC has its benefits.
You’ll be protected from your personal assets and you can build a business credit profile completely separate from your personal finances.
If you are in a sole proprietorship or partnership, you’re personally liable for debts your business accrues and all your personal assets are at risk in the event of litigation.
These types of business entities make it difficult for your business to establish its own credit as a separate entity because there is no legal or financial separation between yourself and your business.
By choosing one of these incorporated business structures, you can create financial separation between yourself and your business:
C Corporation - some business owners avoid C Corporation structures because it’s more extensive setup and costly but if building strong business credit is critical to your company’s success, which more often than not it is, it might be worth the initial hassle and commitment. C corporation is the greatest possible amount of separation between your business and your personal finances.
S Corporation - S Corp offers the same benefits of a C Corp without the expensive tax liability known as double taxation in a C Corp.
LLC - for many, this is a great option as it is technically an incorporated business entity with financial separation and is less expensive registration than S or C Corporations. Although the IRS does not regard an LLC as its own tax entity, most vendors, lenders and credit-reporting agencies treat LLCs as equal to the more formalized corporations like C or S corps.
If you are considering of changing your business’ legal structure, consult with a tax advisor prior to amending it.
2. Separate Your Business and Personal Finances
Although personal credit is important, it’s imperative you keep consumer debt separate from your business debt.
Many small business owners fail to do this and as a result don’t build business credit trade-ins. Instead, they resort to using personal credit to pay off their business expenses.
While it may be convenient personal and business credit are unrelated and should remain so.
If you don’t separate the two and your business becomes at risk, so does your personal credit score.
Even if you’re a sole proprietor, you should consider getting an Employer Identification Number (EIN) and register with the state and local agencies to obtain the proper business license.
You should also get a business bank account with a business credit line and channel all expenses through that.
3. Establish Business Credit Accounts & Build Your History
The same way your personal credit is built, so is your business credit.
Getting a secured business credit card is relatively easy so long as your personal credit is in good standing.
As soon as you get a small business credit card, channel everything through it.
This includes office supplies, utility bills, monthly expenses and other financial obligations you may have for your business.
So long you pay off your credit immediately, this will help speed up the process of establishing a business credit history.
More than ⅔ of small business owners do not have a business credit line.
Make sure you do not fall in the trap of failing to build your business credit history.
Manage the factors that drive your score positively and invest more in what leads to opportunities to grow your business and reputation.
4. Make Payments On Time (Or Better, Earlier).
This is one of the differences between personal credit and business credit.
With personal credit, you typically have a 30 day grace period.
Business credit is entirely different and in fact, paying early serves much more in your favor than just paying on time.
A consistent payment history is not only a major factor involved in calculating your rating but it’s probably one of the most important ones.
Think about it: if you’re seeking another round of investment, do you think creditors will want to give you money if you have a history of delinquent payments?
Every lender looks at a variety of factors when determining whether to lend you money or not.
This includes your income and cash flow from bank checking accounts, credit card receipts, etc. Use your credit wisely.
Each time you pay off a balance, you are improving your business credit so pay off your accounts and small business loans as soon as possible.
It’s also important that you don’t max out your accounts.
Although a growing business needs goods and services on an ongoing basis, overextending yourself and maxing out your accounts is a recipe for disaster.
5. Establish Verifiable Accounts
Once you have a business credit card and making monthly payments, it’s time to expand the number of vendors you have financial dealings with.
Do your research and ask vendors if they will submit a financial experience with you to the credit bureaus.
As a business owner, you should choose to work only with vendors that report to credit bureaus. When credit bureaus and banks see you have a positive relationship with your vendors, they’re assured you have ability to manage debt.
But make sure to verify the information they submit is accurate and reflected on your credit report.
It’s okay to be choosy and not work with vendors that don’t report your timely payments.
6. Monitor Scores.
There is a huge importance to check and monitor your scores consistently - no less frequently than every few months.
It doesn’t hurt your score so there’s really no reason for you not to monitor it on a regularly basis.
By monitoring it regularly you can respond to any errors before they impact your overall rating.
Sign up for alerts that warn you of changes that could indicate fraud and protect your business from non-paying customers, partners and suppliers by checking their business credit report before deciding whether to do business with them or not.
7. Comply with Business Credit Market Requirements
It’s important your business meets all requirements of the credit market to improve the chances of credit approval.
As mentioned before, credit score companies constantly monitor business’s credit, so any red flags can hurt your business and reputation in a substantial way.
These red flags could be as simple as not having a business license or a phone line.
Make sure you do your research and comply with all local, state and federal requirements.
Advice From the Experts
Because there are so many factors and variants that go into your business credit score, it can feel overwhelming at times to know what is right.
We've outlined some of top experts advice on the subject matter.
Check Your Business Credit Report for Errors
We can't stress enough the importance of checking your business credit report and Jacob Lumby, Content Director at Cash Cow Couple puts further emphasis on two simple habits that account for 65% of your credit score.
The first habit is checking your credit reports for any errors or inaccurate information.
If everything is correct, the next step is to make timely credit payments and maintaining low credit utilization.
You can access your free credit report at: https://www.annualcreditreport.com/index.action.
Establish Open Trade-Ins
When a business issues another business credit, it’s referred to as trade credit.
Trade, or business, credit is the largest source of lending in the world so it’s imperative entrepreneurs and business owners understand trade-ins.
Chad Otar, CEO at Excel Capital Management, suggests having open trade-ins that reflect on credit and most importantly, pay them on time.
Business credit bureaus collect information about trade credit transactions to create your business financial profile.
Whether it be prepaid business credit cards or vendor accounts, most alternative lenders look at how trade-ins are paid to determine approval.
Without trade-ins, most vendors, suppliers and institutions won’t approve good offers.
Use Passive & Active Credit Building strategies
Because there are so many factors and players in your business credit report, there’s no definitive approach set in stone that’s best to build business credit.
That’s why Barbara Weltman, President and Founder of Big Ideas for Small Business encourages entrepreneurs to take a multi-faceted approach.
Passive strategies such as paying bills on time and limiting your debt coupled with active strategies like choosing the best lenders serves as the best strategy in establishing good business credit.
Get an Active DUNS Number
One of the 3 main business credit reporting agencies, Dun & Bradstreet requires every business to file for a DUNS number in order to generate a business credit report.
Ian Atkins, Head of Finance at Fit Small Business believes having an active DUNS number is one of the most important tasks you should do as a business owner.
Maintain Timely Payments on Installment Loans
Many banks make credit decisions based on the size of the installment loans the business has managed in the past.
For that reason, Rob Misheloff, President at Smarter Finance USA recommends having at least 12 months’ history of installment loans.
If you have a history of timely payments on installment loans, your credit profile of a small business will greatly improve.
It can be challenging to get approved for other types of credit if you’ve only historically been approved for credit cards.
That’s why obtaining and paying off small business loans in a timely manner is so important for your business credit score.
Apply for Store Credit Cards
If your credit history is limited or less than perfect, you should refrain from applying for big loans or lines of credit.
Keep it small by getting a store credit card at supply stores such as Staples, Lowes and Office Depot.
It is one of the easiest business credit cards to get.
Credit Coach Jeanne Kelly suggests getting a business address at a UPS store or setting up a post office box if you work from home.
Make sure you use your Federal Tax ID number when applying for store credit cards as this is how your business credit begins.
Keep Your Accounts Accurate
Remember that anyone can access your business credit reports at any time and because credit scores change consistently, credit bureaus and lenders keep an active attention to new businesses fiscal responsibility.
James Sinclair, Trade Finance Marketing Manager at Trade Finance Global suggests keeping your accounts accurate and up to date with all details including address, directors and shareholders on top of many other things.
In addition to keeping things accurate, you want to have a clean business history.
Bureaus are able to keep details of bankruptcies and late payments for as long as 10 years.
Establish Lines of Credit With Suppliers Who Report to Credit Bureaus
Founder of Clever Girl Finance, Bola Onada Sokunbi advises new business owners to establish a payment plan over a period of time (i.e. net terms of few days or weeks later) with your supplier.
Then, request they report this line of credit to the credit bureaus to make sure it’s documented.
Conduct Business Through an Established Business Entity
When starting a business, it may feel overwhelming in how to establish it.
Should you do sole proprietorship? Limited Liability Company?
Brian Rogers, Attorney at Blue Maven Law LLC strongly encourages entrepreneurs to organize their business as either a corporation or LLC.
It helps protect your personal assets from your business’s liabilities.
Why You Should Consider Taking a Small Business Loan to Improve Your Business Credit
One of the most obvious goals in establishing good business credit is so you can take out a business loan to manage your financial obligations.
But what many entrepreneurs don’t know is that by taking out a business loan, you are actually also helping your business credit score.
A business loan relies heavily on your credit score.
Therefore, by taking out a business loan and paying installments over time, you are proving your business’ responsibility when it comes to finances.
Banks, credit unions and lenders use your credit score to assess your fiscal responsibility in order to mitigate their own risk.
By proving you are fiscally responsible through consistent payments, you’ll raise your credit score.
Business loans also improves relationships as well.
When bankers see you are fiscally responsible, they’re more open to doing business with you.The same applies to vendors and suppliers who rely on trustworthy businesses.
What Lenders Look For
Small business owners who understand their business credit score are 41% more likely to be accepted when they apply for a business loan according a report by Nav.
Even if you aren’t currently in need of money for your business, don’t wait until you need cash to begin building your credit and relationship with lenders.
Proactively building your business credit ensures you stay ahead of the game internally within your business but also externally when it comes to competition.
Lenders come in different forms but they all look at your business credit to decipher whether your business is capable of meeting payment obligations.
The Five C’s of Credit
Although lenders look at a variety of elements in your business fiscal history, knowing the Five C’s of Credit will help you better prepare for when you are seeking a business loan.
Like the specific qualities distinctive of an individual, the qualities of your business paint an overall picture of your business’ integrity and stability.
This includes the length of time you’ve lived at your current address, the length of time you’ve been at your current job or been in business for yourself and your record of paying bills among many other sorts.
In order for lenders to give you money, you need to show you’re credible and trustworthy of paying them back.
Think about it, would you lend your friend some money if they have a character of never paying it back? Probably not. Neither would lenders.
The difference is, you have a history with your friend.
When you begin your business, you don’t have a history with lenders so make sure you begin building a digital and fiscal portrayal of your character they can rely on.
Another thing lenders look at is your debt-to-income ratio.
By looking at how much you owe compared to how much you earn, they’re evaluating whether you have the capacity to take on additional debt.
If you have a lower ratio, under 40%, creditors are more confident in your ability to pay them back and are more inclined to lend you more money.
Lenders also look at your entire net worth - the value of your assets minus your liabilities.Your ratio to how much you own versus how much you owe should be healthy.
Some lenders look for a secondary source of repayment for assurance.
Any asset you have that could be used to secure a loan is considered collateral.
If you’re a business owner, having any assets available that could serve as collateral is an advantage.
These are the outside circumstances that you don’t have control over but might have an impact on your ability to repay your loans.
Such conditions include the local economy, government regulations that impact your industry and the competition in the market your business is in.
It’s important to keep in mind that not all lenders are the same.
So although some use all 5 C’s of Credit, many also develop their own scorecards or systems to decide whether they should lend you money or not.
And it’s also important to understand that even if you have a strong business credit, it doesn’t guarantee you’ll be approved for a loan.
It most certainly helps though so it’s a good idea to understand what lenders are looking for as you build your business credit.
How to Get Your Business Credit Score
Each business credit scores and reporting bureau can have different information for the same business and therefore, end up producing a different score.
There are 3 main credit bureaus that every new business owner needs to actively and consistently get reports from: Dun & Bradstreet, Equifax and Experian.
It’s crucial to review your credit reports on a regular basis because your credit score can change drastically by very few factors.
By monitoring these changes, you can ensure you’re business is on the best financial trajectory and address any changes before they affect your ability to secure financing.
Each bureau offers a snapshot of your credit score on a one-off basis but it may be in your best interest to pay a regular fee for credit monitoring on a more consistent basis.
There are also other services that will send you business alerts relating to bankruptcy, judgments, liens, charge-offs, large score drops and new inquiries.
Make sure you do thorough research on the 3 credit bureaus and 3rd party services to learn what products and services are best for your business, before you sign up.
The last thing you want to do is throw away money at services that aren’t best for your business needs.
Because you can review your credit file anytime and however many times you’d like, use that to your advantage in developing a long-term financial strategy.
Accessing Your Credit Report From Dun & Bradstreet
Dun & Bradstreet uses a PAYDEX score to measure a business’s payment history on a scale of 1 to 100.
Vendors and suppliers use this score to determine what terms to extend credit.
Typically, the better the score, the better the terms are.
A score between 1 and 49 indicates a high risk of late payment; 50 to 79 indicates moderate risk; 80 to 100 indicates a low risk of payment default (which is what you want to aim for).
In order to access this file, you’ll need CreditBuilderTM Plus.
For $159 a month, this product gives you your full credit file and score, enables you to add positive payment experiences to your file and dispute any false or inaccurate information.
Accessing Your Credit Report From Experian
For $39.95, you can purchase a CreditScoreSM Report which will include your Experian business credit score.
The Experian’s Intelliscore PlusSM is a score ranging from 1-100 that predicts your payment behavior.
It combines a variety of data pulled from your payment history as well as other sources to predict the chances you will fail your payments in the next 12 months.
This prediction is regarded as the most reliable and economical in the credit industry calculated on variables such as:
- Trade Line and Collections Information
- Recent Credit Inquiries
- Public Filings
- Key Financial Ratios
- New Account Activity
- Other Performance Indicators
A score between 1-10 means you are considered a high risk to lenders; 11-25 means you’re medium to high; 26-50 means you’re a medium; 51-75 means you’re low to medium and 76-100 means you’re a low risk to lenders.
For an additional cost, you can get ProfilePlus Report that includes information such as payment history and inquiry details or a subscription service for ongoing access to all information.
Accessing Your Credit Report From Equifax
A single credit report with Equifax cost’s $99.95.
It shows your Equifax Business Credit Risk Score and your Equifax Business Failure Score which, like the other algorithms, uses a variety of factors to measure the likelihood you’ll repay loans on time and the likelihood your business will fail respectively.
What To Do If You Find Inaccurate Information
Pulling your own business credit score is considered a “soft inquiry” and therefore does not affect your business credit score.
Because you can check it as many times as you’d like without it being revealed to potential lenders or creditors, make sure you take the time to do so to ensure all the information is accurate.
Your business credit score is not static and often changes over time.
For that reason alone, creditors tend to view your business credit report on a continual basis.As a business owner, you should do the same.
If you notice your credit score is low, there could be an error in the report (or you could be too nascent in your business to have enough credit history to warrant higher scores).
If you do find false information, there are certain steps you should take to fix it immediately.
Timeliness is important here. For any incorrect business information, you can submit a request for updates using this page for Experian.
Mistakes do happen.
It’s possible that your business got mixed up with another or wrong information was submitted.The first thing you should do is contact the credit agency that generated the score.
If you’re able to prove their information is incorrect, they will adjust the report and resolve the discrepancy.
If you need to dispute certain details on your Experian business credit report, follow the directions here to write to Experian Commercial Relations.
Monitoring your credit on a consistent basis also ensures your identity isn’t compromised.
Business credit scores change all the time.
Whenever there is new credit information added to your report, your score will change.
In addition to each business credit reporting agency collecting different information, they also collect information at different points of time, each month.
That’s another vital reason to be on top of your business credit score.
What Can Harm Your Business Credit Score
Just how you can take steps to build and improve your credit score, there are many different things that can negatively impact your credit score.
Some of these factors include:
- The number of years you’re in business
- The number of business credit lines you’ve applied for in the last 9 months
- New lines of credit opened and the number of business credit lines used in the last 6 months
- Any collection amounts or tax liens in the last 7 years
Building business credit is not easy but it’s important you understand the factors that go into your credit score to ensure you implement the best strategy and practices to have exceptional business credit.
Building a business takes a lot of guts.
There’s a lot to do at any given time and many business owners fail to realize how important having a good business credit score is.
Whether you are just beginning, growing to newer heights or coming back from a setback, working on your business credit should be of top priority.
Having a solid business credit score provides many benefits from better financing terms, to easier access to business facilities to so much more.
Just as you worked to build strong personal credit history, your business needs to build its own credit history and business credit score.
Don't let a simple mistake like not staying on top of your business credit prevent you from reaching the massive success you are capable of.
By following our guide above, you can help ensure your journey as a business owner is a success from the start.