Your Business Credit Score Matters—Here’s Why

As someone who works closely with small business owners, I know how important it is to understand the tools that can help your business grow. One of those tools is your business credit score.

Just like you have a personal credit score, your business has a business credit score. And if you own or help run a small business, that score plays a bigger role than you might think. It can affect whether you qualify for financing, how others view your company and even how your business grows over time.

What is a business credit score?

A business credit score reflects how well your company handles its financial responsibilities. It tracks how consistently your business pays its bills, manages credit and handles public financial records.

This score is separate from your personal credit score. One does not affect the other. Business credit scores focus entirely on the financial activity of the business itself.

Another key difference is that personal credit reports are private, while business credit reports are public. That means lenders, vendors or potential customers can view your score at any time to get a sense of your company’s financial reputation. 

How are business credit scores calculated?

Business credit scores are measured on a scale from 1 to 100. A higher score usually means your business is in a stronger credit position. Several factors can influence your score:

• Your payment history with lenders or vendors
• How much of your available credit you are using
• The length of time your business has been in operation
• Any public records such as liens, bankruptcies or judgments
• Your industry type and its overall risk level

Good financial habits can help your score improve over time. Paying on time, using credit wisely and regularly checking your credit report can all make a difference.

Why your score matters

Your business credit score can affect your ability to get business loans, lines of credit or credit cards. It can also come into play when leasing equipment, securing insurance or working with new vendors. 

A stronger score may also help you qualify for better interest rates with more flexible terms. Even if your personal credit is strong, it’s worth building a solid credit history for your business as well.

Read more about how business loans and lines of credit can help you achieve your business goals.

How to check your business credit score

Unlike personal credit reports, business credit reports are not free. However, checking your score regularly is a smart way to stay informed and address any issues early. You can request a report directly from one of the major business credit bureaus:

• Experian^®
• Equifax^®
• Dun & Bradstreet

Once you get your report, take time to review it for accuracy. If something looks wrong, you can file a dispute. Even small inaccuracies can affect your ability to qualify for financing.

Keep your business credit in good shape

Having credit is not a bad thing. It is a normal part of running a business. The key is to use it wisely and stay informed. Check your business credit score regularly, make sure it reflects your business accurately and take steps to keep it healthy. Find more practical tips in our blog on managing the ongoing financial health of your business.

If you want to talk through your options or need help understanding your credit profile, our team is here to help. Or if you’re looking for a small business loan or line of credit, we can help with that too.