10 Tips for the Best Business Credit
  • Alan Hayon

10 Tips for the Best Business Credit

Updated: Sep 19, 2019

The world of lending and credit reporting is a harsh reality for consumers and business owners. A majority of owners know nothing about business credit or that it even exists.


We've discovered that numerous business owners:

  • Assume that every one of their creditors and vendors automatically report.

  • Don’t plan ahead of time for acquiring lines, credit, loans, leases, or the best installment terms by demonstrating a low risk, good balanced business and individual credit picture.

  • Don't have any idea about their profiles being an 'open-book' and can be assessed by anybody without their knowledge.

  • Don’t understand the worth of showing amazing credit scores for increasing new business accounts, partners, and the best financial related tools.

  • Need cash, however don't have any idea how their business and individual credit impacts their capacity to qualify or what they need monetarily to qualify.

  • Think in the event that they're paying their bills their business credit will be great.

Here are a few tricks for maintaining the best credit:


1. Make payments on time.


Try to pay early and always pay on time in order to get the best business scores. Paying before terms may be a difficult request for some companies with a limited cash flow. It's something we suggest in light of the fact that the lenders and bureaus will look positively on a business that can pay early, which will bring about a lot higher business score.


If you have a bookkeeper managing your payments; make sure there are no errors that may cause you to be delinquent on your accounts. Review your books on a regular basis to make sure that all of your payments are being made and on time.


2. Be careful with taxes

Tax liens can harm business credit profiles and the general credibility of an business. The IRS gives businesses a very short time frame to pay their bill after they receive a demand for payment letter. Some businesses have reported not receiving their bill or find it difficult to pay the bill on time. If the payment goes past due, a lien will be generated. Even after the lien is paid, it can negatively impact your business credit for years to come.


3. Ensure your business exists.

The quality of your credit does not generally originate from the vendors you buy from and the algorithm that generates scores. Numerous banks, lenders, and sellers will take a gander at the building blocks of your business to gauge how successful you are and will be. What sort of effort would you say you are making to gain exposure and generate business?

  • Do you have a website?

  • Do you have a toll-free number?

  • Can potential clients easily find you online and physically?

  • Are you active on social media?

  • Do you have your business phone, address and website listed in public business listings?

  • Do you have good reviews?

  • Do have a business bank account?

  • Do you have a business credit file?


4. Build long lasting relationships.

Networking and build relationships with business owners is an important part of owning a business. Not only do you build credibility, but you strengthen the relationship between your clients and vendors. For new vendors, clients, suppliers and investors to be comfortable working with your business you need to be able to strengthen the confidence and communication. This helps build trust.


5. Research is important.

Research current and potential partners, lenders, vendors and creditors before working with them.


Creditors/Lenders: Find out if they report loans to business credit and ask them which bureau they report to before agreeing to their terms.


Vendors: Ask them who they report to before working with them.


Some companies may check potential supplier and/or customer credit reports before doing business. This is a good way to decide if there is any risk to your business in working with them.


6. Use a physical location.

Using a PO Box is a red flag to vendors due to the risk of fraud. A lot of partners and lenders agree on this; when a business is established enough to send/receive mail at a physical location, they become a lower ris business.


7. Get to know your industry.

Some industries benefit from business credit than others. For example, if you’re a trucking dealer your credit scores will be pulled from your shippers and carriers. In order to enter into contracts and stay in business, dealers must maintain great credit. If information is reporting as negative it raises a red flag for carriers and shippers. They will not want to risk working with a dealer with negative information and will end up passing to a competitor who presents a lower risk.


8. Be consistent.

Ensure your Phone Numbers, Addresses, DUNs Number, EIN and any other identifying figures are consistent across all profiles, listings, accounts, and licenses. You want to make sure that your information is consistent so that lenders and creditors know that you are monitoring the information and it is up-to-date.


9. Build up business accounts.

To exist in the realm of banking, you need open business bank accounts. This will help build your bank rating by keeping your business and personal finances separate. Banks have a proprietary score/ranking and they do not have to explain or share it. It is not published and you will probably never see it, but your bank rating will be important if you plan on going for a loan.


10. Always monitor your credit.

One of the most exceedingly terrible things you can do is expect that you have business credit. Request your business credit reports from Experian, Equifax, and Dun and Bradstreet. It's essential to focus on all three since they report varied info. Lenders may utilize one or all three reports to determine creditworthiness.


(Keep in mind: depending on your industry, there are a handful of other business credit bureaus that may impact your borrowing status.)


Watch for any red flags on your reports. If you see irregularities talk with a business credit pro to get more knowledge. Each profile is one of a kind; some businesses may require business credit repair, monitoring, building, or a mix of the three.