5 Ways to Improve Your Business Credit

It’s no secret that traditional banks take an extremely outdated approach to business financing.

Your business credit score is one of the least influential factors that our underwriters consider. At Business Funding America, we take a step back and assess the health of your business based on a more comprehensive approach. This allows us to provide higher approvals for businesses with any level of risk assessed. That being said, we are here to help steer your business toward success, and provide you with useful advice that will help you get cheaper long-term financing should you ever need it.

Our friends at the SBA (Small Business Administration) have provided us with 5 tips to build better business credit that we feel it is our duty to bring to all business owner’s attention. Take a quick look below at our infographic, then discover how each tip can impact your business credit score.

5 tips to improve your business credit score


1. Make Prompt Payments.

Whether or not you pay your receivables on time is a major determining factor in your D&B Paydex score, which directly affects the rates & terms that lenders will offer your business. Businesses with the best Paydex scores will typically make payments at least 30 days before the terms dictate.

2. Increase Credit Limits.

Almost every traditional lending institution allows you to request an increase in your credit limit after only 6 months. Even if you are not planning on using the extra credit, this can be a major advantage for your business because it lowers your credit ratio (see #4 below).

3. Add Trade References.

While you don’t have control over which vendors & suppliers report their positive payment experiences, you can manually add trade references to your D&B credit profile. In fact, in order to even obtain a D&B Paydex score, your company must list at least 3 trade references, so it’s a good idea to make sure your prompt payment efforts (see #1) are being reported where it matters.

4. Improve Your Credit Ratio.

Every lender heavily considers your credit ratio as one of the major determining factors in a businesses ability to repay any amount of requested financing. A good target is to always utilize about 30% of your existing credit lines. An easy way to lower your credit ratio is to increase your credit limits (see #2), and this can often be done with a simple phone call.

5. Keep Your Business Profile Updated.

You are your business’ best advocate and you can paint your business in the best light possible by personally updating your business profile and making sure that your areas of excellence stand out. Make sure to check your business profile continuously for inconsistencies because let’s face it, reporting agencies aren’t perfect.

Building your business’ credit score should be a long term goal, and we are here to support you throughout. Take a look at our recommendations on How to Leverage Your Business Potential the Right Way.

Jason Bray
Jason Bray
Marketing Manager & Senior Developer for Business Funding America.