What is a Business Credit Score and How do I Improve Mine?

You probably think that you know almost everything that there is to know about your credit score. This is something that the average person has been taught to learn because of the importance that it plays in taking steps forward in our lives. The individual who owns a business is going to be even savvier than the average consumer in this area because a good personal credit score can be crucial to getting the loans necessary to launch a business. But did you know that your personal credit score isn’t the only credit score that matters when it comes to doing business? There’s also such a thing as a business credit score and it can be equally as important as the personal credit score to moving a business forward over time.

When you start earning money and developing credit as an individual, the information is tracked using your personal identification number (your social security number). The same thing is true for the business. As soon as you’ve gotten an employer identification number and started to use it on financial documents, the information is being tracked. That information leads to a file which is considered to be your business credit report and it ultimately leads to the creation of your business credit score. This score is easier to understand in terms of the numbers because it’s a simpler rating system than your personal credit score. A personal credit score ranges from 300 to 850 which can confuse people. In contrast, the business credit score ranges from 0 to 100 with 75 or higher being a good credit score. That’s fairly easy to keep in mind.

So now that you know that a business credit score exists and that it’s important, how can you make yours better? The first thing to do is to get some information about your existing business credit reports. There are four major business credit bureaus that track this information. Two are the same as two of the personal credit bureaus: Equifax and Experian. The other two are Business Credit USA and Dun and Bradstreet. Just like you need to see your personal credit report to make sure it’s accurate, you need to see your business credit report to know how to improve it.

The one important difference between the personal and business credit score is that businesses lending money to another business aren’t required to report that to the credit bureaus whereas personal credit lenders are. As a result, you may find that businesses lending you money in the past didn’t report the information which means you may have a positive business credit history that was never reported. The quickest way to improve your business credit score is to ask these lenders to report the information to the credit bureaus. From that point on, it’s just a matter of making sure that you always use your Employer ID Number when getting business loans and that you request the information to be reported to the business credit bureaus. And make sure to stay on top of payments so that the business credit score stays high!