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Boost Your Business Credit Scores: A Marketer’s Guide

by | Feb 4, 2025 | Business Credit

As a business owner, you know that a good personal credit score is important for things like getting a loan or renting an apartment. But did you know your business has a credit score, too? Mastering your business credit score is like holding a golden ticket – it opens doors to favorable funding, lucrative supplier deals, and coveted clients. Business credit scores: they’re not just numbers on a report – they’re the keys to unlocking new growth opportunities. In this guide, we’ll translate the jargon and give you the lowdown on what really matters.

Table of Contents:

What is a Business Credit Score?

A company’s credit score is basically a report card for its financial health, wrapping up its credit history into a single number. Just like a personal credit score, it tells lenders, suppliers, and insurers how risky it is to do business with you.

With a higher score, you prove to lenders you’re a smart money manager who can handle debt responsibly, paying it back when promised. This can mean significant savings in the long run – think lower premiums, better loan deals, and a stronger hand when negotiating with suppliers.

How Business Credit Scores Work

Several business credit reporting agencies calculate these scores. The most widely used are Dun & Bradstreet, Equifax, and Experian. You’ll find that different agencies employ their own distinct scoring systems, none of which are exactly alike.

This means your business can have different scores with each agency. Think of these agencies as detectives – they sniff out

clues from vendors, banks, and public records to build a detailed profile. One major influence on your credit score is your credit history profile, which includes your history of making timely payments, your credit utilization rate, and the time you’ve spent building credit – all crucial components that lenders review carefully.

Key Factors Affecting Business Credit Scores

While scoring models vary between agencies, most look at common business characteristics. Don’t leave your business credit scores to chance – pinpoint the driving forces behind them and take control of your financial future.

Here are some key characteristics considered by agencies, like Dun & Bradstreet, when determining your business credit report and score:

  • Payment History: Paying your bills on time is critical. Fall behind on your payments and your credit score takes a hit.
  • Credit Utilization: This refers to how much of your available credit you’re using. Prudent borrowers know that keeping credit usage low is a critical component of a healthy financial profile. For example, use business credit cards for new vendor lines or inventory but keep monthly usage under 25-30% of your credit limit. Limit the number of checking accounts you open to show responsible money market management.
  • Credit History Length: Lenders like to see a borrowing history. If you don’t use business credit, start opening business lines today, such as a business checking account or business cards.
  • Public Records: Any bankruptcies, liens, or judgments against your business will appear on credit reports and lower your scores. Personal loans may also affect this.
  • Industry Risk: Some industries, like restaurants or bars, are inherently riskier, affecting lending requirements and interest rates. For businesses operating in high-risk sectors, access to credit can be restricted due to the heightened scrutiny from lenders and insurers, who seek comfort in higher credit scores before approving a loan. Consider CD rates or money market accounts for better interest rates. Snag a great auto loan deal and enjoy a low interest rate to boot. The nitty-gritty of an application hinges on this information, which lenders scrutinize carefully.

You’re probably wondering, why the fuss over business credit scores?

A strong business credit score is vital for your company’s financial well-being – it’s like having a second safeguard against financial setbacks. Strong business credit scores unlock financing options like unsecured business loans. Securing a SBA loan under $500,000 often depends on a good FICO SBSS score of 155 or above. What follows is elite access to preferred lending agreements, courtesy of our ties to prominent banks.

Good business credit can also enable faster vendor payments and lower premiums with trade credit agreements. With a solid

financial footing in place, the possibilities for growth and exploration become endless, and the future starts to look very bright indeed. Here’s a breakdown of the benefits:

  • Getting Loans and Credit: A good business credit score helps secure loans and credit with better terms. It’s like having a golden ticket to loan approval – lenders will take one look at your enhanced application and feel a whole lot better about your ability to pay them back.
  • Favorable Terms with Suppliers: Some suppliers check your score before offering trade credit (e.g., 30, 60, or 90 days to pay). Scoring high translates to real power in your wallet – you’ll have the leverage to negotiate superior terms and take control of your finances. Our goal is simple: make sure customers get what they want, while also fostering strong ties with our suppliers – it’s a two-pronged approach that pays off. Use available business cards to your advantage.
  • Lower Insurance Premiums: Your business credit score can affect insurance premiums for various policies (property, liability, commercial auto). having good credit can actually save you money on premiums, but a poor credit history can hike up your costs.
  • Attracting Investors: Good business credit demonstrates healthy financial operations, which attracts investors. Investors look for stability and trust in how businesses manage their finances, so maintaining quality business credit cards and other payment histories will improve chances.
  • Competitive Advantage: Building a strong business credit profile is like sending a signal to the business community that you’re a responsible financial operator. It opens doors to new opportunities, helping you stand out in front of clients, vendors, and competitors. Look into refinance rates or lenders if needed.

How to Establish and Build Business Credit

Here’s an overview of what each agency includes in its report:

AgencyReport Highlights
Dun & BradstreetPaydex score (1-100), failure score, delinquency score
EquifaxPayment index, credit risk score, business failure score, public records
ExperianBusiness credit score (1-100), financial stability risk rating, payment trends

If you’re just starting to build business credit, follow these steps:

  1. Incorporate Your Business: Formally incorporating creates a separate legal entity, which is essential for building business credit. Think of it as a financial firewall: separating your business and personal credit keeps your personal assets safe and helps lenders understand your business’s unique financial situation.
  2. Get an EIN: An Employer Identification Number (EIN) is required to establish business credit and open business bank accounts. It’s like a Social Security number for your business. Having a business checking account demonstrates financial responsibility.
  3. Open a Business Bank Account: One essential step in keeping your business financially fit is separating your company’s finances from your own – this simple habit will help you maintain a sterling credit record. Maintain accurate records of income, expenses, loans, and payments for creditworthiness and tax purposes. Consider available business checking account features for financial management and organization.
  4. Establish Trade Lines: Work with vendors who report payments to credit agencies. Starting with small vendors and accounts helps establish positive payment history and demonstrates creditworthiness over time. Revamping your credit starts with two crucial factors: your savings account and mortgage rates. Don’t overlook them! A tight-knit group of vendor partners can provide the leverage you need to land larger funding deals in the years to come. Be sure to examine year CD rates for maximizing benefits from banking partners.
  5. Get a Business Credit Card: Use your EIN to apply for a business credit card and start building a positive payment history with a card issuer. Say goodbye to juggling multiple credit card balances and hello to saving money on interest. A balance transfer can help you get a better grip on your credit utilization and lower your payments. Responsible use of a business credit card and timely payments demonstrate your financial stability. Look into rewards business credit cards that offer incentives for their customers. Consider business cards for a checking account that provide multiple functions for your finances.
  6. Monitor Your Reports: Regularly review your reports from Dun & Bradstreet, Experian, and Equifax for errors or inconsistencies. Correct any inaccuracies promptly. Pay close attention to trade lines, balances and vendor line information.

Where to Get Your Business Credit Reports and Scores

You can access business credit reports from Dun & Bradstreet (Credit Insights), Experian (business credit report), and Equifax (business credit reports), often for a fee. Some banks, like Bank of America, offer free access to reports through business banking accounts, such as Business Advantage 360 accounts (including Business Advantage Fundamentals checking). Explore the available business services and look into higher CD rates available for some customers. Some lenders have lower auto loan rates, but you’ll need good business credit scores. Find refinance lenders if you want to restructure loans or personal credit cards.

The final verdict is in: it’s time to draw the curtain, reiterate key takeaways, and offer one last impression.

A business credit score is like a reputation meter for your company’s financial management – and a high score can give you a major competitive edge. Boost your financial cred by mastering credit scores – it’s a ticket to lower interest rates, more favorable supply contracts, and plummeting insurance premiums.

Building strong business credit involves fundamental practices: paying bills on time, using credit responsibly, and promptly addressing reporting errors. Each step paves the way for perks like advantageous trade credit, trust from investors, and a fortress-like position in the market that’s hard to shake. Consider student loan options if you want to invest in future employees.

Grasping the ins and outs of business credit scores is like having a secret weapon to help your company thrive in the long haul. Good credit is like having a superpower – it opens doors to new financial possibilities and lets you build strong, long-term relationships with lenders and partners. Research various mortgage lenders for potential borrowers and secure low year mortgage rates to boost interest.

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