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As a business owner, it’s important to understand what your business credit score is and how it can impact your ability to obtain financing. Your business credit score is a three-digit number that lenders use to assess your risk as a borrower. The higher your score, the better your chances of getting approved for a loan or line of credit.

There are a number of different business credit scoring models in use, but the most popular one is the FICO Small Business Scoring Service (SBSS). This scoring model takes into account factors like payment history, length of credit history, and types of credit used. The SBSS is used by major lenders like American Express, Bank of America, and Wells Fargo.

If you’re looking to get a business loan, it’s important to know what your business credit score is. Here’s a detailed guide to understanding business credit scores and reports.

What’s the difference between a personal and business credit score?

Your personal credit score is based on your personal credit history, while your business credit score is based on the financial history of your business. Personal credit scores are used by lenders to assess your risk as an individual borrower, while business credit scores are used to assess the risk of your business.

How can I get my business credit score?

There are a number of ways to get your business credit score. You can order a report from a credit bureau, such as Experian or Dun & Bradstreet. You can also use a credit monitoring service, like Nav or Credit Karma.

What’s included in a business credit report?

A business credit report includes information on your business, such as your company name, address, and contact information. It also includes your payment history, length of credit history, and credit utilization. Public records, such as bankruptcies and liens, will also be listed on your report.

How can I improve my business credit score?

There are a number of things you can do to improve your business credit score, including:

  • Pay your bills on time: This is the most important thing you can do to improve your score.
  • Maintain a low credit utilization ratio: Try to keep your balances below 30% of your available credit.
  • Build a longer credit history: The longer your business has been in operation, the better.
  • Diversify your credit mix: A mix of revolving lines of credit and installment loans can help improve your score.
  • Keep public records clean: Any bankruptcies or liens against your business will damage your score.

How can I get financing if I have a low business credit score?

If you have a low business credit score, you may still be able to get financing from alternative lenders, such as online lenders or peer-to-peer lenders. These lenders typically focus on other factors, such as your personal credit score and annual revenue, in addition to your business credit score.

It’s important to know your business credit score if you’re looking to get a loan. There are a number of different factors that can impact your score, including payment history, length of credit history, and credit utilization. You can get your business credit score from a credit bureau or a credit monitoring service. 

There are a number of things you can do to improve your score, including paying your bills on time and maintaining a low credit utilization ratio. If you have a low business credit score, you may still be able to get financing from alternative lenders.

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