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Business Credit Profile: Best Way to Raise Credit Score?

Published By Faith Stewart at March 24th, 2021

Business Credit Profile: Best Way to Raise Credit Score?

best way to raise credit score Credit Suite2 - Business Credit Profile: Best Way to Raise Credit Score?Your business credit profile is the overall picture of the creditworthiness of your business. Lenders look at it to determine whether or not they want to lend to you. Your business credit score is likely the most important piece of this.  As such, it’s important to know the best way to raise credit score.  You have a personal credit profile alsol, and that is considered by most lenders as well. 

Total Business Credit Profile Management: The Sure-Fire Best Way to Raise Credit Score

In fact, many lenders look at your personal credit profile first. However, if you have a strong business credit profile, it can only help you. Your business credit score is a huge part of that, so you need to know the best way to raise credit score for business. 

Best Way to Raise Credit Score: What Is a Credit Profile? 

Of course, you cannot let the rest of your business credit profile go unattended. Before you can work to execute the best way to raise credit score, you have to understand and learn how to manage your total business credit profile.

Your business credit profile is everything the business credit reporting agencies have on your business. For example, your open trade accounts, payment history, how you stand up in relation to other businesses, and more. The top three business credit reporting agencies are Dun & Bradstreent, Experian, and Equifax. FICO also offers a business credit report known as the FICO SBSS.

best way to raise credit score Credit Suite3 - Business Credit Profile: Best Way to Raise Credit Score?

Keep your business protected with our professional business credit monitoring.

When a potential lender looks at your business credit profit, it can pull from any of these.  The report will contain a business credit score, but it will contain a lot more as well. 

Best Ways to Raise Credit Score: What is a Business Credit Score

So, what exactly is a business credit score? It is similar to your personal credit score, but it is for your business. Unlike your personal credit score, it is connected to your EIN, not your social security number. It is a numeric rating assigned to your business that helps a lender determine how likely your business is to repay debt. The number is calculated based on a number of things.  The most influential factor is your payment history.

The more positive payment history you have, the better. That means two things. First, the longer you have been paying accounts on time the better your credit score will be. Also, the more accounts you are paying on time the better your score will be. 

Best Way to Raise Credit Score? 

So, what is the best way to raise your business credit score? The simple answer is to increase positive payment history and reduce negative payment history.  Let’s break it down further.

Add More Trade Accounts

It sounds simple, but it’s not really.  Unlike personal credit, not all business credit accounts report to the business credit reporting agencies. With personal credit, your payments on accounts are automatically reported to personal credit.

You have to be intentional about finding business credit accounts that will report.  This can take some time and digging.  A business credit expert can come in really handy here. Most vendors do not make it easy for the average Joe to find out if they report or not. A business credit expert will likely have relationships with vendors that allow them to know or find out this information more easily.

Aside from this, you can talk to vendors  you already have a relationship with. You can ask them to report your payments if they already extend you credit or net terms on invoices.  If they do not, you can ask if they will, and if they will then report. They don’t have to , but if they do, this can be the best way to raise credit score quickly.

You can also talk to providers that you pay monthly.  Everyone pays utilities, phone, and internet bills.  Ask those providers to report your payments to the business credit reporting agencies. They do not have to, but they might.  If they do, this is another great way to improve your business credit score.

Handle Accounts Responsibly

Handling your business responsibly in every way affects your entire business credit profile. However, handling your trade accounts responsibly by making consistent, on-time payments is the number one best way to increase credit score. After all, the business credit score tells lenders how likely you are to pay, and nothing predicts future behavior like current habits.

Monitor and Correct Your Business Credit Report

Sometimes the best way to raise your credit score is as simple as correcting mistakes.  However, without credit monitoring, you cannot know what those mistakes are, or if there are any at all. Personal credit monitoring is easy. You can access a full, complete report annually for free. Not only that, there are a plethora of free apps that offer a peek at your credit score and summary report throughout the year.
best way to raise credit score Credit Suite3 - Business Credit Profile: Best Way to Raise Credit Score?

Keep your business protected with our professional business credit monitoring.

That is not the case with your business credit report however. You have to pay to get a glimpse of it at all.  Each of the big three offer monitoring options, for a fee. Credit Suite can help you monitor your business credit for a fraction of the price

Business Credit Profile vs. Personal Credit Profile

To better understand the best way to raise credit score for your business, it can help to understand some of the differences between business credit profiles and personal profiles.  There are many, but these specifically seem to cause a lot of misunderstanding and confusion among borrowers when they are denied funding. 

Late Payments

Both business and personal credit reports are affected greatly by late payments. Yet, business credit scores are affected faster. Late payments are not reported to personal credit reports typically until they are 30 days past due. Late payments on business credit accounts are reported if only one day late.

Inquiries

Hard credit checks on your personal credit will lower your credit score. However, business credit reports are different. A credit check on your business credit profile does not affect your business credit score.

Data Reported

In addition to late payments being reported much more quickly, accounts on your business credit profile are listed by industry.  In contrast, personal credit lists the name of the company that issues the credit.

Also, personal credit reports show the exact amounts of accounts, while business credit reports show rounded amounts. How long data stays on a personal credit report varies, but typically it’s the life of the file. Information stays on business credit reports an average of 3 years.
best way to raise credit score Credit Suite3 - Business Credit Profile: Best Way to Raise Credit Score?

Keep your business protected with our professional business credit monitoring.

Also, with personal credit accounts,  almost every account reports to the credit reporting agencies. In contrast, only about 7% of business credit accounts report to business credit reporting agencies. This is why you have to be intentional to get accounts reporting to business credit, and that is only one of many reasons working with a business credit expert is the way to go. 

One last thing to note about business credit versus personal credit is this. While your business credit profile is totally separate from your personal credit profile and does not affect in any way, the reverse is not true.  Your personal credit information can affect your business credit profile, and in some cases, even your business credit score. 

What’s the Best Way to Raise Credit Score for Your Business? 

There isn’t really one best way to raise credit score. In reality, the best way depends on what is pulling your score down to begin with. Is it a lack of sufficient history? Then you just have to give it time. Are there not enough accounts? You need to add more. Are you not paying on time? Start paying on time!  Are there mistakes on your business credit report? Fix them. However, one thing is for sure. Whatever the problem is, paying your accounts consistently on-time will only raise your score. You cannot go wrong there.

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