personal credits cards for small business
Sean Salas
By: seansalas
Read in 4 minutes

3 Steps To Improve Your Business Credit

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Do you qualify for a
small business loan?

To improve your business credit score takes time and patience. But, there a few best practices you can start TODAY. If you want your business to be better positioned to access cheap capital, you better
apply best practices to build business credit.

Step 1: Pull a Credit Report from a Business Credit Bureau

It is important that, as a business owner, you understand what you are dealing with. In this case, you must pull a credit report from one of several business credit bureaus. Often there can be erroneous information in the file (e.g., wrong addresses). You must address these mistakes immediately. Other issues present bigger challenges. Still, the starting line is the credit file.

These are two good business credit bureaus that can assist you:

  1. Equifax: Reach out to Equifax to get a copy of your Business Risk Indicator Report for $7.49. Monthly monitoring services start at $5.99/month.
  2. Duns & Bradstreet (D&B): Be sure to apply for a unique nine-digit identification number (D-U-N-S). It’s free and easy, and you should do it for each location of your business. After you sign up,  you will get FREE alerts and other upgrades. Also, you will get detailed explanations of your business credit.

Step 2: Review and Attack Issues in Credit Report

Establish a game plan to address each of the most critical problems on your credit report. Let’s say there is a missing final lease payment. Get to the institution reporting the missing payment and resolve it. One way or another, the issue needs to be “closed”. Another example is when your credit card balances are too high, which is very common. Put an alternative financing plan in place to bring those balances down. If there is a lien (much more serious), remove it to secure any sort of funding from an entity such as a bank. Traditional lenders won’t loan to a client with liens. If there is a major issue such as bankruptcy, there is no fast way around other than time and a good payment record.

Step 3: Establish a Good Business Credit Record

If your company is new, it is far easier to establish a good business credit record than to rebuild one. Start by opening a credit card in the name of the business, and keep monitoring your credit. If you are an established business using your personal credit cards, create a plan to pay them off. Then begin to transition all lines of credit under your business name. Keep less than a third of the available credit outstanding, and pay regularly. This is one of the fastest ways to establish a good business credit score.

Do you qualify for a
small business loan?