5 Ways to Build Your Business Credit Score Quickly


According to research, nearly half of small businesses are unaware that business credit scores exist. Those that do say they navigate the funding process quickly and are more optimistic about growing their businesses.

A good business credit score is a financial tool businesses use to secure loans and build relationships with vendors and other companies. Here are five ways to build your business credit score quickly.

1.   Establish Your Business

To build your business’ credit score, you must follow protocol and establish your business properly. Decide if it will be a sole proprietorship, partnership, corporation, or limited liability company. Choose a business name and get an official phone number.

Get a work email address and business address and get the business listed in the local directory. Doing so gives your business a professional look and makes it more credible. Also, ensure the company is duly registered with the secretary of state.

2.   Get an Employer Identification Number (EIN)

Your EIN is like a social security number that the government uses to identify your business. You’ll need an EIN for the business to file tax returns and apply for a business bank account and other business licenses.

Your EIN separates personal and business finances, which is critical in building your business credit score. Use your EIN to pay all business taxes promptly to remain in good standing with the government. You’ll also need an EIN to apply for a business credit card or get loans from financial institutions.

3.   Get a Business Credit Card

Open a business bank account and get a credit card. Transact regularly using the credit card to build a good relationship with your banking partner. Your business credit card can boost your credit score when used responsibly.

Get your business credit card from an issuer that reports major financial activities to the consumer credit card bureaus. Positive reports about your account will help build your business credit score faster. With a good credit score, your account won’t be flagged as a high risk merchant account.

4.   Build Relationships with Vendors

Create contracts and maintain healthy relationships with vendors and suppliers by paying for goods promptly. Some vendors report to credit agencies, which is why you need to have a good payment history.

Credit agencies will check your Days Beyond Terms (DBT) before rating your business credit. Late payments will negatively impact your business credit score, even if it’s just for a day. Aim to pay your bills on time or before the due date.

5.   Monitor Your Credit

Credit reporting agencies work differently and collect their data from different sources. As a result, they may have conflicting data about your company. Monitor your credit reports regularly to ensure everything tallies. It’s easier to detect and correct any wrong information about your company if you notice anomalies. You can do this by filing a dispute with the credit bureau. You’ll also know if your accounts are helping improve your score or if you need to adjust some things, like adding more credit references.

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