Trouble With Business Credit? 10 Easy Ways to Improve Your Score

Business.com / Finances / Last Modified: February 22, 2017

These entrepreneurs built their good credit by taking a few simple steps every month. Learn how you can do the same.

Building your business credit can be a lot more challenging than building your personal credit, as if that wasn't already hard enough.

Having a good credit profile for your business isn't just about keeping its finances in order.

Not only does it help you qualify for a business loan, it plays an important role in building your overall credibility since its available to the public online.

That means potential customers, investors and partners can check your business's financial standing.

The good news is that you don't have to be a finance whiz to build good credit; it's just a matter of taking a few simple steps that improve your business credit over time.

The successful entrepreneurs below from YEC share the 10 tips that keep their finances in good graces.

Related Article: Before You Swipe: 10 Important Things to Know About Business Credit Cards

1. Pay On Time, Every Time

With your existing business credit, even if that's just one credit card, make sure you pay on time, if not early, every month. This shows you are responsible with credit and stay on top of your obligations. – Angela Ruth, e-Cash

2. Correct Inaccurate Data Reports

Order a business credit report and carefully review the data. Experian, Equifax and Dun & Bradstreet, the three major business credit bureaus, all claim to carefully vet their information in their reports, but sometimes their data is incorrect. It's up to you to correct the mistakes on your company’s credit report by contacting the bureaus and providing evidence disproving their information. – Brett Farmiloe, Markitors

3. Automate Your Payments

To build up your business credit, you need to make timely payments. Take away the stress of remembering when bills are due by automating as many payments as possible. Also, try to set up payments to directly bill your credit card. That way, you can review one statement at the end of the month instead of several smaller bills. – Nicole Munoz, Start Ranking Now

4. Limit New Accounts, and Don't Close Old Ones

We often get pulled in by the big signing bonuses of corporate credit cards, but opening new accounts does have a small but noticeable effect on your creditscore.

Even worse can be getting a hard pull on your credit without getting approved for the card. The other is to keep your unused accounts open. If there is an annual fee on those cards, close newer cards rather than the older ones. – Fan Bi, Blank Label

Related Article:Power of Plastic: What to Look for in a Business Credit Card

5. Use Credit as Debit

Use your business credit cards as debit cards. Pay as many of your expenses as possible using credit cards or lines of credits, then, at the end of the month, take the balance back to zero. Don't allow the debt to grow; pay everything off on a monthly basis to show responsibility and repayment capacity. – Marcela De Vivo, Brilliance

6. Ask for a Raise

Credit utilization, the percent of credit used out of total credit available, is a major factor in your credit score. When paying down debt isn't an option, sometimes increasing your total credit can be. Rather than adding more accounts, ask for increases in credit lines, credit cards and other debt-financing products. – Ross Beyeler, Growth Spark

7. Reduce Your Perceived Risk

You simply need to show that you’re a safe bet for lenders. The most important part of this is to pay on time. If you have a pending payment, make it on time or early. If you can’t pay, contact your lender and talk about your options. The worst thing you can do is bury your head in the sand. Most lenders will work with you to establish a reasonable schedule. – Vik Patel, Future Hosting

8. Arbitrage for Airline Miles and Cash Back

One of the keys to building stronger business credit is to leverage your credit cards to generate airline miles and cash back. You should look for every opportunity to pay with your perks-based credit card over using cash or check. For instance, the American Express Plum Card offers 1.5 percent cash back with no cap. The more you use the card, the more you'll earn and your credit will improve over time. – Kristopher Jones, LSEO.com

9. Don't Carry Debt

If you have any debt, make sure to pay it off. Whether it's your personal finances or your business finances, carrying any kind of debt will make it hard to improve your credit, and before long, you could find yourself in a situation in which you're unable to keep up with payments. If you aren't terribly organized, either get in the habit of paying early or paying the moment you spend. – Ismael Wrixen, FE International

Related Article:Ways to Pay: Credit Card Processing Tools All Small Businesses Should Use

10. Personally Guarantee the Debt if You Have Good Credit

Let's face it, startups are unknowns to lenders. But, chances are, you've been building credit as an individual long before you started your company. Start small with unsecured credit lines with a bank you personally do business with, and personally guarantee it. When they see diligent and timely payment behavior, they will increase the lines automatically. – Andre Chandra, I Print N Mail

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