Your company’s business credit score is a measure of financial health based on information compiled in business credit reports. It assesses the ability of a business to acquire loans and pay its bills. The four major business credit bureaus are Dun & Bradstreet, Equifax, Experian, and FICO SBSS. Although they have diverse scoring criteria and systems of measurement, the means to improve your business credit score remain the same across all the credit bureaus.
Keep Personal and Business Finances Separate
The first step in building your business credit score is completely separating your personal and business financial affairs. This involves having separate bank accounts and checking accounts. Start your company credit history by acquiring a business credit card, and begin building a good credit score by always making payments promptly.
Work With Vendors That Report to Bureaus
When you’re choosing vendors, suppliers, and lenders for your company, find out which ones report your payment history to the credit bureaus, and work with them. If you have already established relationships with these businesses, request that they report your data to the credit bureaus, as there is no cost to them for doing so. Keep in mind that your payment history only benefits your business credit score if you pay your bills on time or early.
Use a Minimum of Credit
Credit utilization ratio is the difference between your company’s total available credit and the amount of credit that you actually use. To improve your business credit score, you have to keep your credit utilization ratio low. It’s considered high if you go above 33 percent of your available credit.
Monitor Your Credit Reports
Periodically monitor your business credit reports to be sure that they are error-free. If you find mistakes that might impact your business credit score, report them to the appropriate credit bureaus immediately so that they can rectify the errors.
For more advice on improving your business credit score, look to GrowthCC.