Guide to Business Credit Scores and Reports
Your business credit score is a number that lenders use to determine your
creditworthiness. This number is based on information in your business credit
report, which includes your payment history, credit utilization, and other factors.
A good business credit score can help you get approved for loans and lines of
credit, and can also get you better interest rates and terms. A strong credit score
can also help you build your business by making it easier to get vendor lines of
credit and lease equipment.
There are a few different business credit scoring models, but the most common is
the FICO SBSS score. This score ranges from 300 to 850, with higher scores
indicating better creditworthiness.
To get started, you'll need to get your business credit report. You can order this
report from the major business credit reporting agencies: Dun & Bradstreet,
Experian, and Equifax.
Once you have your report, take a look at your score and see where you can
improve. If you have a low score, don't worry – there are things you can do to
improve it.
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Pay your bills on time: This is the most important factor in your business
credit score, so make sure you're always paying your invoices on time.
Keep your credit utilization low: This is the percentage of your available credit
that you're using at any given time. Lenders like to see a utilization rate of 30%
or less.
Manage your personal credit: If you're a sole proprietor, your personal credit
score will be used to determine your business credit score. So it's important
to keep your personal credit in good shape.
Build a positive business credit history: The longer your business has been in
operation, the better. A history of responsible credit management will help
improve your score.
By following these tips, you can improve your business credit score and make it
easier to get the financing you need to grow your business.
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