Tips To Improve Your Credit Score

For the D&B Paydex score, you need a D-U-N-S number in addition to your employer identification number. As with personal scores, paying your bills on time is one of the most important scoring factors. However, unlike personal credit scores, some business credit scores reward you for paying your bills upfront. Such negative background checks effects on your business credit report can lead to higher interest rates and even a rejection of a credit card or small business loan. Keeping track of changes to your business credit report can give you plenty of time to fix any issues that might be a factor in applying for the small business credit line.

Work with providers who report to business credit reference agencies and pay them early. Established companies with a low business credit score can sometimes rely on the business owner’s personal credit score for loans and lines of credit. A personal score ranges from 350 to 850, and you can request a free credit report each year to check your status. Paying financial obligations on agreed terms is the first and most important step in improving your business credit score.

The business credit score works almost like the personal credit score: Lenders report business loans and payment history to the credit bureaus, who then calculate a business credit score. When your business credit isn’t perfect, improving it should be at the top of your to-do list. There are several things you can do to clean up your small business credit reports and improve business credit scores. This guide breaks down everything you need to know to find your way to a better business credit score. Opening, using and paying off business credit cards is another way to build business credit.

The importance of a good business credit score is second to none, but how can you build a good credit score from scratch? The first step is to set up your business legally and apply to various business credit reference agencies. The second step is to develop good financial habits to maintain your credit score.

You can talk to a credit reporting agency to assess your credit score, some, such as Equifax Small Business, offer consulting services to help you manage your business credit profile. If you use credit cards to fund your business, stick with business credit cards for those expenses. Avoid charging personal expenses on business cards or business expenses on personal cards. Dun & Bradstreet, Equifax Business, and Experian Business are the best agencies that track business credit scores, but checking their reports will cost you. However, it’s worth keeping track of your company’s credit scores, especially if you’re considering applying for a business loan in the near future.

All business accounts, not only loans, but also recurring expenses such as utilities and leases, should be determined in the name of your company. You should also make sure that your business suppliers report your payment history to a business credit bureau. Creating a business credit score helps your business build the credibility that matters to banks, lenders, suppliers, and partners. Experian business credit reports help owners and financial officers better understand the health of the companies they do business with.

Three of the most important are Dun & Bradstreet, Equifax Business and Experian Business. For example, Dun & Bradstreet uses what it calls a D-U-N-S number® to track any physical location of businesses: you’ll need to request one to appear in your system. Having a nine-digit D-U-N-S number® allows other companies or the government to make an informed decision about whether or not to lend to you or work with you.

If you don’t have a business credit history, there are many credit cards that strictly analyze your personal credit or finances. The first step to building business credit is to legally establish your business as a sole proprietorship, corporation, partnership, or limited liability company. Create a legal name and set up a business phone number, giving your business more credibility with suppliers and the government. As with the legal incorporation of your business, this makes your business known to business credit reference agencies. It may take several months for new accounts to appear in your company’s credit reports.

Finally, you’ll want to track your score throughout the year to make sure your score accurately reflects the positive financial habits you’re developing. Register your company legally and apply for a federal employer identification number and a D-U-N-S number®. Buy a business credit card and bank account and make all your business purchases with them.

Before you buy it, use the “Find a Business” tool on the site to see if Experian is tracking your business. Some business credit scores, including Intelliscore Plus and FICO SBSS scores, consider homeowners’ personal credit to be a factor. In fact, your personal credit score can be one of the most important factors, if your business is new.