Best Ways to Boost Your Small Business Credit Profile
Your company's credit profile will determine whether you'll be approved for loans and what you'll pay for them
It’s still rough for small businesses to get credit these days. A January 2012 report from the National Federation of Independent Businesses found that 46 percent of small business owners who applied for credit lines were rejected and 35 percent of business loan applicants were turned down.
Dun & Bradstreet (D&B), Equifax Small Business Enterprise and Experian SmartBusinessReports, among others, track a business’s creditworthiness through its payment history and issue business credit scores. Your business credit profile helps determine if your company will be approved for a loan and at what interest rate; it may also help you avoid the requirement of a personal guarantee. The profile can be important even if you’re not looking for a bank loan or credit line, since suppliers and other businesses granting installment payments use these reports to set their credit terms.
Make sure your business is listed with D&B, Equifax and Experian so they record your payment history; you can do this by conducting a search for your company at the agencies’ websites. Also, check with your bank manager or loan officer to ensure that the bank is reporting your business’s payment information to those bureaus.
Next, ask the vendors who extend credit to your business if they report to credit bureaus. Try to work with ones who do. Then, your on-time payments with these vendors will build your business credit history, too.
You can't get a free annual report for your business, the way you can obtain a free personal credit report from annualcreditreport.com. That means you’ll need to pay for one, and agencies charge varying amounts depending on what you want. Experian’s options range from $8 for a bare-bones summary to nearly $50 for a full report, for example. D&B offers subscription packages to monitor your report, with prices ranging from $19.99 to $69.99 per month.
Finally, don’t fall for scams from firms claiming they’ll clean up your credit report for a fee, warns Dunn. No one can do a better job rectifying mistakes and settling accounts than you can.
