How to Improve Business Credit Scores: A Guide for Small Business Owners (2024)

Many businesses will need to borrow money at some point to fuel their growth. As part of this process, your business credit score determines whether or not you qualify for financing and the terms that are set. The higher your credit score, the more you’ll be able to borrow and at better rates.

Much like a personal credit score, your business credit score reflects your company’s repayment history with loans, credit cards, and other debts. Improving this score (building your business credit) goes beyond the basics of making timely repayments.

What is a business credit score?

Considering that 45% of businesses don’t know they have a business credit score and 82% don’t know how to interpret their credit reports, the answer to this question is relatively important.

It’s true. Your business has its own credit score. The amount of debt you owe largely determines your credit score. The frequency with which you pay its debts and how often you seek new sources of credit also influence your business credit score.

Other metrics that determine your business credit score include your outstanding balances, payment history with vendors and lenders, and the record of purchases you’ve made with vendors (also known as trade experiences). Credit reporting agencies will also examine your company size, risk factors in your industry, and the amount of credit you’ve used compared to the amount your lenders are willing to give you (also known as your credit utilization ratio).

Reporting bureaus take this information and assign your company a business credit score. Unlike a personal credit score, which goes to 850, business credit scores have a lower maximum range. Depending on the bureau, your maximum score will generally either be 300 or 100, with a few exceptions.

How can you check your business credit score?

If you’re looking to check your business credit score, start by getting reports from major bureaus like Equifax, Experian, or Dun & Bradstreet. Dun & Bradstreet usually charges around $60 for a comprehensive report, which includes details like your credit summary, PAYDEX score showing how promptly you pay your bills, and a financial stress score evaluating your overall financial health. Plus, registering for a DUNs number with Dun & Bradstreet sets up your credit file, which is handy.

Equifax offers a report for $99.99, focusing on public records and a business failure score to give you an idea of your company’s sustainability. Meanwhile, Experian’s report, priced at $36.95, provides more basic insights into your company’s credit projections. Remember, each bureau has its own way of calculating scores, so it’s wise to check reports from different sources to get a complete picture of your business credit.

How to improve a business credit score?

Your credit score is largely determined by public information, as we mentioned before. But that doesn’t mean that there aren’t several steps you can take to make your business credit look as strong as possible. There are several ways you can improve your business credit score beyond opening credit accounts and being good about repaying debts on time. It’s important to go beyond these elementary tasks if you want to be proactive about guarding your business credit score against erroneous information, fraud, or unwarranted demerits in your credit history. If you’ve covered the basics of getting a solid business credit score already, here are some of the tactics to take to truly take charge of your company’s credit.

Apply for (and use) a business credit card

Building a credit history means — you guessed it — using credit. Creditors love to see that a business uses its credit wisely over a long period. The longer you can demonstrate a track record of proper credit card usage, the better.

If you haven’t already applied for a business credit card, do so as soon as you can. You may not have the highest credit limit or the snazziest card, but it’ll put you on the right path toward building your credit history. From there, you can go on to apply for cards with greater perks or higher credit limits once you’ve established yourself.

Establish trade credit with recurring vendors

Setting up trade credit with repeat customers (or vendors) is another great way to demonstrate your creditworthiness. Trade credit is the notion of performing services or getting goods from a company without demanding payment after every transaction. Whenever your vendor provides you with their business and does not request cash upfront or upon delivery, they’re extending you trade credit.

Trade credit goes a long way regarding creditworthiness because it demonstrates that you’re dependable and pay your debts accordingly. If your suppliers can trust that you’ll pay on time at the end of a predetermined period, other creditors will be more likely to trust you as well.

Apply for a line of credit

Another excellent way to build credit history is through a line of credit. A business line of credit is a set amount of money that a lender agrees to provide to your business. You can draw money from the line of credit when you need to use it and pay interest only on the amount of money you’ve borrowed.

Lines of credit are great for building your credit history, as they show that lenders trust you to be diligent about repaying your debts regularly. You’ll build trust with your existing lender and show other potential lenders that you’ve got a good history of fulfilling your obligations.

Monitor business credit score changes

Your business credit report isn’t always perfect. Just like with a personal credit report, it’s common to see errors that could unfairly damage your overall score. Monitor your business credit report often, and report any erroneous information as soon as you see it. This can help ensure that your company gets assessed fairly, and fix any potential mistakes quickly.

Pay your bills on time (or before they’re due)

This one might sound obvious, but paying your bills promptly is the best thing you can do to keep your business credit score as high as possible. Many companies report your payment history to credit agencies, so the quicker you pay, the better your score will look. Instead of using traditional methods like checks or regular ACH, which can take days, consider using instant payment options like Forwardly. It’s free and takes just seconds to process a payment, making bill payments simpler and faster.

How to Improve Business Credit Scores: A Guide for Small Business Owners (1)

Have a mix of credit

Using a business credit card is great for your credit score. But having a line of credit, instalment loan, and a business credit card can be even better. This demonstrates that your business can maintain several kinds of credit at once. The more diverse your credit lines are, the more you demonstrate your ability to pay off what you owe under different circ*mstances. You’ll have to use each of these credit options wisely, however, or you can end up doing more harm than good.

Sustain a good credit utilization ratio

Merely opening a business credit card account isn’t enough to show that you’re creditworthy. You need to actively use the card (or your line of credit, if that’s your preference) to give credit monitoring companies a glimpse into your trustworthiness. The more you use your credit card — and pay your bill on time — the more these agencies can trust that you’re a good candidate for loans.

Aim to use only 25% of the total amount of credit provided to your company, however. Carrying a high balance can make you look like a riskier bet, as it signals that your business might not have the cash to pay for goods through other means.

Keep an eye on the big picture

When you connect your accounting software to Forwardly, you get the free cash flow forecasting tool you need to monitor the key facets of business financial health. Our dashboard gives you the charts and graphs you need to see how your income compares to your expenses or how your overall inflows compare to your outflows.

Your credit rating and risk profile aren’t formed in a vacuum. They’re the sum of many moving parts and the more you know the more you can plan and respond accordingly. Managing risk and cash flow shouldn’t be intimidating. With the right tools, financial management is empowering.

Get started today and give your business the tools to build success.

How to Improve Business Credit Scores: A Guide for Small Business Owners (2024)


How to Improve Business Credit Scores: A Guide for Small Business Owners? ›

While LLCs can be started at any credit level, there will be some notable disadvantages for business owners who have bad credit. Here are a few examples: Money will be hard to come by. Having bad personal credit will generally make it more difficult to get a bank loan to start or expand your LLC.

How do I build my business credit score? ›

How to Build Business Credit Quickly: 5 Simple Steps
  1. Step 1 – Choose the Right Business Structure. ...
  2. Step 2 – Obtain a Federal Tax ID Number (EIN) ...
  3. Step 3 – Open a Business Bank Account. ...
  4. Step 4 – Establish Credit with Vendors/Suppliers Who Report. ...
  5. Step 5 – Monitor Your Business Credit Reports.
Dec 5, 2019

How to increase a business credit score? ›

Seven tips to help improve your business credit score
  1. Pay promptly. Try to pay your invoices on time wherever possible. ...
  2. File on time. It's important to submit your accounts and returns by the deadline. ...
  3. Avoid County Court Judgments. ...
  4. Limit credit applications. ...
  5. Ask for a quote. ...
  6. Stay up to date. ...
  7. Don't forget partners.

How to improve a company's credit rating? ›

There are several steps you can take to improve your company credit score:
  1. Pay on time. ...
  2. Avoid County Court Judgements (CCJs) ...
  3. Make changes if you notice a drop. ...
  4. Check the credit score of your suppliers and customers. ...
  5. Share data with a credit reference agency. ...
  6. Don't apply for credit unless you need to. ...
  7. File on time.

How do I raise my Sbss score? ›

How do you improve your SBSS score?
  1. Pay your bills on time. Your payment history accounts for a significant chunk of your credit score, so the best way to improve it is by paying your bills by their due date each month. ...
  2. Reduce your credit utilization rate. ...
  3. Use good accounting practices.
Mar 25, 2024

How to build credit with an EIN number? ›

How Do I Build Credit With My EIN?
  1. Apply for a D-U-N-S number. ...
  2. Improve your personal credit score and apply for a business credit card. ...
  3. Make business credit card payments on time and in full. ...
  4. Monitor your business and personal credit reports.
Apr 2, 2024

What credit score does an LLC start with? ›

While LLCs can be started at any credit level, there will be some notable disadvantages for business owners who have bad credit. Here are a few examples: Money will be hard to come by. Having bad personal credit will generally make it more difficult to get a bank loan to start or expand your LLC.

How long does it take for a small business to build credit? ›

Can You Get Business Credit Right Away? While it takes about 12 months to build solid business credit and as many as three years to build a comprehensive credit profile, you can start building at least some business credit within the first six months.

Do credit cards help build business credit? ›

Using a small-business credit card is one way you can build your business credit — but depending on the card issuer, it can affect your personal credit too, particularly if you fall behind on payments.

How to build business credit in one month? ›

Use this account responsibly, make prompt payments to vendors and creditors, consider getting a secured business credit card, and ensure your business information is reported to credit bureaus to establish a positive credit history.

How do I fix bad business credit? ›

How to Improve Your Bad / Thin Business Credit Score
  1. Don't Mix Your Business and Personal Finances. ...
  2. Pay Your Bills on Time. ...
  3. Build Credit with Vendors. ...
  4. Keep Your Credit Utilization Ratio Low. ...
  5. Check Your Credit Reports and Ensure Accuracy. ...
  6. Open Additional Credit Lines.

What does B mean for business credit? ›

What is a B credit rating? A credit rating given to a prospective borrower that's not of investment grade Sometimes known as a B2 rating, it suggests a company or government is able to meet its financial commitments but may be left highly exposed to adverse economic conditions.

What is #1 factor in improving your credit score? ›

1. Payment History: 35% Making debt payments on time every month benefits your credit scores more than any other single factor—and just one payment made 30 days late can do significant harm to your scores. An account sent to collections, a foreclosure or a bankruptcy can have even deeper, longer-lasting consequences.

What is the SBA scoring system? ›

The FICO SBSS score ranges between 0 to 300, with 300 being the highest score. A higher score indicates lower risk. SBA Small Loans require the lender to prescreen the application using a FICO SBSS score. The current minimum SBSS score for 7(a) Small Loans is 155.

How can SCORE help a small business? ›

SCORE provides free, confidential business advice through our volunteer network of 10,000+ business experts. You can meet with a mentor online or face-to-face in a chapter near you. To request a mentor, visit and search for a mentor by keyword, industry, location, or expertise.

What is a liquid credit score? ›

The FICO LiquidCredit Small Business Scoring Service℠, a.k.a. FICO liquid score or FICO SBSS, is a global business credit score. It gives banks and other lenders a view of how the owner, as well as the business, perform in both personal and business money management.

What is the minimum credit score to start a business? ›

Still, a higher credit score of 700 or above generally means you'll be eligible for funding with more attractive terms. And while it's possible to get a business loan with a credit score as low as 500, a lower credit score could make it more challenging to qualify for a business loan.

How long does it take a business to build credit? ›

Building business credit typically takes around six months to a year of consistent financial activity, including making on-time payments to creditors and vendors, maintaining a positive bank account balance, and demonstrating responsible credit usage.

Can I use my EIN to get a loan? ›

You can apply for a business loan with your EIN if you're a new business owner without established credit. However, you may also need to include your SSN and details about your personal finances because you'll likely have to provide a personal guarantee.


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