Building Small Business Credit

Establishing a small  business credit reports is just the first part of the credit building process. Once all of the business credit bureaus that you wish to build credit with have reported accurate information about your business, it can start building credit.

Small business owners must understand that a business credit score is a tool lenders, suppliers and other creditors use to quickly evaluate the whether the business will pay its bills on schedule. Learn how to build business credit in a way that will benefit your business and it will pay off dividends. 

A credit score is a complex statistical analysis tool. Understanding the factors that impact your business credit score will greatly improve your ability to improve it. The following factors impact your business credit scores:

  1. Number of business tradelines
  2. Outstanding balances
  3. Payment history
  4. Credit Utilization
  5. Business Trends
  6. Frequency, timing, and amount of Public Records
  7. Business Demographics: Industry, Business Size, Business Location

Business Credit Bureaus have minimum requirements for Generating a business Credit Score

  1. Experian: 1 Business tradeline and/or 1 Demographic Event
  2. D&B: 3 Business Tradelines

In essence adding tradelines to your business credit report while maintaining the accuracy of information reported to the business credit bureaus, avoiding bad payment history, excessive credit utilization, a high debt to income ratio are the best ways to build a solid business credit profile. 

LEARN HOW TO BUILD BUSINESS CREDIT

OR

Read Part 4 of The Small Business Credit Blog

 

Small Business Finance, Small Business CreditOusmane Toure