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How to Improve Your Business Credit Score

Your business credit score is one of the most important numbers you’ll come across as a small business owner.

You’re likely aware of how vital a good personal credit score is to gaining access to financing – and paying less to borrow that money – for things such as car loans and mortgages. Well, business credit scores are every bit as important for small businesses. They help determine your ability to access products such as business credit cardsand business loans, and may even be the deciding factor when it comes to partnering with other companies in the future.

Like with personal credit scores, small business scores are primarily overseen by three reporting agencies – Experian and Equifax, which you’re probably familiar with in the personal-score space, as well as Dun & Bradstreet, a commercial data and analytics firm. Unlike FICO scores, which range from 300 to 850, business credit scores typically span 0 to 100. But they work in a similar way: The more trustworthy a borrower you are, the better your score … and the better the score, the more likely you are to be approved for borrowing, at more favorable rates.

Needless to say, you want to get your business credit score up and continue to improve. Here’s how.

4 Tips for a Better Business Credit Score

1. Check It!Even awareness counts for something. If you didn’t know until just a few paragraphs ago that there even was such a thing as a business credit score, or if you did know but have never thought to check it out, make today the day. A few sites can give you access to free credit reports from at least one of the major reporting bureaus, though they do have limitations. Nav, for instance, will allow you to view free summaries of your Experian and Dun & Bradstreet reports, but you must pay for full reports. CreditSignal will let you monitor activity with your D&B rating, but again, you can’t actually get your score for free. Typically, access to your actual score requires paying one of the ratings agencies. (For example, Experian charges $49.95 for a single report, though you can also join a subscription program, too.)

2. Follow Good Personal-Score Hygiene: Two of the most straightforward tips for maintaining a strong personal credit score also hold true for improving your business credit score. For one, just pay your bills on time; late payments are one of the biggest strikes against potential borrowers. Also, keep your credit utilization ratio – the difference between your credit limit and how much of it you actually use – low. Obviously, this means paying down your balances as low as possible, but it also helps to ask for higher debt limits (just don’t use all that extra ceiling) and even open additional lines of credit.

3. Call Shenanigans: If you see something on your credit report that doesn’t look familiar, flag it immediately. Negative items on your report can weigh down your score, so if you see something that also doesn’t look familiar, ask – it might be an error, or it could be outright fraud. Either way, clearing that up will help improve your score.

4. Get Your Suppliers Involved: This tip can’t be used with one-off relationships, but if you do have any regular suppliers that you’re positive you can pay regularly, ask about starting a credit account with them. This way, when you make your usual, on-time payments, you’ll actually improve your credit history, too.

Your business credit score can be the literal difference between having access to a lifeline and not, and having a high credit score can save you tens of thousands of dollars in interest payments over the long haul. So don’t guess – leave it to the pros. McManamon & Co. offers accounting, consulting and other services to small and midsize businesses, and we can help you take all the necessary steps toward propping up that vital number.

Take the reins on your small business’ credit situation. Call McManamon & Co. at 440.892.9088 or contact us online.


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