Building Your SBSS Score: Steps to Improving Your Business Credit / Funding / Last Modified: February 22, 2017

Set yourself up for financial success with these four steps to take when building your business credit.

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The SBSS, or Small Business Scoring Service, Score is an important number for all small business owners to become familiar with.

This business credit score generated by FICO and used by the U.S. federal Small Business Administration, or SBS, is based upon personal and business credit history, and other financial information.

Having a strong SBSS Score of over 140 on a scale of 0-300 is a great way to quickly secure a small business loan at a good rate.

Improving the score is a matter of handling business finances with the same diligence with which personal accounts are handled.

Related Article: Business Credit Secrets: What You Don't Know Can Hurt You

Though an SBSS score is a measure of business, not personal, credit history, the two are intertwined. When it comes to building up your SBSS Score, maintaining a strong personal FICO score definitely matters. “70 percent of U.S. businesses are operated as sole proprietorships, so there is a close relationship between personal credit and business,” says Joshua Schnoll, Senior Director of Product Marketing for FICO.

By taking a common sense approach to improving an SBSS Score, you’ll quickly be on the road to obtaining the small business loan needed to build an enterprise.

Did you know?

In the business world, there are many more credit reporting agencies than there are those for personal credit. In addition to Equifax and Experian, credit bureaus like Dun & Bradstreet, Paynet and others are involved. These companies each have very different credit assessments of a company.

In other words, the business credit score isn’t as standardized as the personal credit score, but the extra confusion doesn’t lessen its importance. “Even without a business credit history, your personal credit history can make up 50 – 90 percent of your SBSS score,” says Min Choi, Managing Director of Business Development for LoanMe.

1. Begin Establishing Your Firm’s Financial Record

Once it has been decided that a small business loan is in order, the first step to take is establishing your small business’s financial track record. The personal financial history should be separated. Get a free D-U-N-S number from Dun & Bradstreet. This is similar to a social security number, but for a business.

In order to begin establishing business credit and create a solid SBSS score, a federal tax ID number will be needed. Then open a business bank account and credit card. Incorporating or forming a partnership or limited liability company is also a key step. Since one of the factors the SBSS Score is based on is firm age, don’t delay the formal founding of your business.

Next, according to FitSmallBusiness, make sure you are placed in the correct industry category by a lender.  Lenders often have different risk models based on which industry a company is in. Small business owners should make sure that they have the right Standard Identification Code on their credit reports.  

2. Pay Bills Early and in Full

The best way to achieve a strong SBSS score is by paying all business bills on time. In essence, the SBSS score is a tool lenders are using to find out if you’re a good bet. Paying bills on time and in full conveys that defaulting on a loan would be unlikely.

“A strong history of business credit with timely payments to vendors and suppliers may help boost your SBSS score,” explains Levi King, CEO of Nav. “If you have derogatory or no credit history, it can take months or even years of positive credit activity to move your SBSS score significantly higher. It’s vital to build your credit and ensure it’s healthy before you need it.”

Also, adds King, “…you may just need time to show solid business financial history that makes your business look more like a solid bet.”

The SBSS Score is based, in part, on financial statements provided by the business, audited accounts or management accounts, information about how the business pays its vendors, and factors that address how the business fulfills its other financial obligations. This means it’s a good idea to keep detailed and orderly books and records. If you don’t have an excellent bookkeeper or accountant, don’t delay, find one now.

Related Article: The Keys to Business Financing Success

3. Monitor Your Business Credit

David Bakke, a finance expert at, suggests reviewing your business credit report using a website like Experian. “Look for any inaccurate information or accounts that do not belong to your company,” he says. “Get those squared away and your score will also improve.”

The U.S. Federal Trade Commission provides useful instructions for disputing errors with the three main credit reporting agencies Equifax, Experian, and TransUnion. Once errors are removed and a credit score subsequently elevates, the chances for loan approval can improve.

Track your SBSS score with the same regularity personal credit scores are monitored. “At present, FICO doesn't offer a direct score to small businesses,” cautions Schnoll. However, according to, Dun & Bradstreet offers free alerts to changes in your business credit file. For a nominal fee, it can be tracked with a variety of other services and educational materials at, and other sites.

4. Use Your Credit

Use business credit regularly and responsibly. Do not close credit cards, and keep debt levels low relative to your credit limits. The amount of all balances divided by the total credit limit for all cards is called the credit utilization rate, and should be between 10 to 30 percent. If staying under 30 is not possible for you, a term loan can be an excellent alternative to better protect your credit from being negatively impacted.

After having a business credit card for a year, see if the limit can be raised. This can improve a business credit score. It’s important to build up personal and business credit scores before applying for a loan. If turned down for a small business loan, the lenders are not required to explain why.

Using the right alternative online lender may improve a credit score because it will report payments to the credit bureaus. Keep in mind that alternative online lenders, such as LoanMe, have loan options available for businesses with low personal credit scores as well as fixed monthly payments paid over a long period.

Related Article: Will Work for Funding: 7 Ways to Finance Your First Small Business

The bottom line when it comes to building and maintaining a high SBSS score? “Really, it's running a business in the same way as running your personal life,” concludes Schnoll. “Paying your bills, doing things to make your business financially sound.”

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