Common Questions and Answers

5 Smart Ways to Strengthen Your Business Credit

By Brian Spero, a writer for Money Crashers Personal Finance

In these days of corporate layoffs and economic skepticism, companies have to be more concerned than ever to maintain a solid position within their communities. If you run a company, your business credit is akin to your reputation. Without a strong credit profile, you face the reality of being denied an account, or at least seriously compromising your monthly limits and rates and imparting an unwelcome message to your employees.

Whether you are starting from scratch, growing fast, or climbing back from the depths, you work hard to build the keystone relationships of your business. Here are some ways to apply that same proactive approach to your company's credit standing.

1. Build Your History

In the same way an employer scrutinizes past experience on a resume, financial institutions look for solid indicators to confirm that extending credit to your business is a safe bet. The most important first step after obtaining a small business credit card is to put your new found credit to good use. Channel everything from office utility bills to monthly expenses through your account to speed up the process of establishing a history.

2. Consider Your Personal Credit Score

While it's best to keep business credit completely separate from your personal finances, there remains a connection between the two. Small business owners can help themselves exponentially by maintaining a good credit score. When setting up a business credit line, lenders will typically look directly at personal credit history if no prior business history exists. This is especially true when there is a lack of substantial collateral. If creditors can see that you have handled money matters responsibly in the past in your own life, you're more likely to seem worthy of borrowing funds to fuel your business.

3. Make Timely Payments

A regular and stable bill-payment history is not the only factor involved in calculating a business's credit rating, but it's one of the most important ones. Make it a mandate that all business bills be paid on time, and be sure not to use more than 30% of your credit limit. Few elements make a stronger statement toward responsible borrowing and relationship building with a lender than establishing consistency in this regard. It sends a clear message that your business has sound financial procedures, spends responsibly, and has the ability to cover its monthly expenditures.

4. Establish Verifiable Accounts

One proven way to make a major impact on your business credit score is to expand the number of vendors with whom you have financial dealings. When credit unions and banks see that you have positive relationships with your sub-accounts, they are assured your outfit is maintaining community connections while solidifying its ability to manage debt. To make sure these efforts are rewarded with a higher credit score, request that all of the vendors report your timely payments to the applicable agencies. Then, verify that it's reflected on your credit report.

5. Monitor Scores

Just as you want to keep regular tabs on the health of your individual credit report, it's advisable to do the same for your business credit score. Especially for companies, the picture can change dramatically in a short period of time, so take a thorough look no less frequently than every few months. This way, if errors show up, you can respond before any serious damage is done to your overall rating. Experian offers a business credit monitoring product that alerts you when changes (from scores to inquries) occur in the report. It's also helpful to create a long-term credit score goal to serve as a sort of financial carrot on a stick.

Final Thoughts

Having a robust credit rating will put your business in a more powerful position to succeed. With a solid ability to make purchases and qualify for loans, you'll gain the flexibility needed to grow your company in healthy stages. In business, as in life, reputation is everything.

5 Reasons to Monitor Your Business

Business owner

  • 24/7 monitoring of your company's Experian credit score
  • Automatic email alerts of any unusual activity in your company's credit report that might indicate fraud
  • Unlimited access to your company's most up-to-date credit report and score
  • Dark Web Surveillance
  • Business Fraud Resolution Support

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Do you have more questions regarding Experian business credit reports? Return to the home page of for more commonly asked business credit questions, additional resources, and special offers to help you manage and grow a business.

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