4 min readJul 14, 2022

How to Improve your Small Business Credit Score

As a small business owner, the goal is to grow your business, scale it and be successful; however, you will need help to achieve this, especially in terms of funding. You would sometimes need external financing to fulfil your business needs. Fortunately, several financial institutions cater to loans for small and medium-sized businesses. Accessing these loans, though, may be difficult for one reason or the other, and your business credit score is such a reason.

A credit score indicates your business’s overall financial health and whether your business is a good candidate to receive loans from financial institutions. The credit score of your small business is critical to growth because without that, accessing loans would be difficult. It is essential to maintain good creditworthiness for your business financing success.

A business credit score is the financial history of your business, that is, the debt, payment, credit, and risk of your small business. A credit score is a 3-digit number between 300 to 850 (using the VantageScoring model). Figures between 300 to 629 are considered bad credit, 630 to 689 is fair credit, 690 to 719 is good credit and between 720 to above are excellent credit scores.

There are ways to calculate your business credit score, and we advise you to seek a financial consultant’s services to ensure your business is on the right path. And if your small business falls behind in this aspect, do not worry, there are active steps that can boost your credit score. In this article, we’ll talk about the ways you can improve the credit score of your business

  • Establish a business credit history

Most times, small businesses start by using personal funds and the owner’s credit; however, as soon as possible, it is necessary to separate your business finances from personal ones. Opening a business bank account, obtaining a line of credit in your business name, and making financial transactions through the company’s account is crucial to building a credit history for your small business. Doing this establishes an official trail of information to determine your credit score.

  • Check your credit report

It is common for small businesses to forget the credit history of their business until they need to apply for a loan. This is not ideal for your business, as any credit report inaccuracies should be noted and fixed immediately. It is crucial to monitor your business’s credit history regularly to ensure that everything is up to date and accurate. Checking your credit report also helps you know your credit score and whether you need to improve it. Your credit report would be requested when you apply for a loan; it is a great asset to your business, so you cannot be reckless with it as a business owner.

  • Pay your bills on time

This is pretty obvious and one of the easiest ways to improve your business credit score. Paying your business bills on time is a strong indicator that you would not be a risk to lenders or vendors. Timely payments to suppliers, utility companies, and landlords or even paying before the due date gives you an edge in increasing your credit score. It can be overwhelming to keep up with your bills, so there are a few tips to aid you. Track all your bills in a spreadsheet for easy access. Automate as many payments as possible. Choose a day in the month to sort out bills. File invoices immediately and set reminders for due dates.

  • Maintain a low credit utilization ratio

A credit utilization ratio measures how much credit you use compared to your available credit. An excellent way to improve your credit score is to keep the utilization ratio low or decrease it in cases where it is already high. There are a few strategies your business can employ to maintain a low utilization ratio, such as ensuring to keep all balances at zero or as close to zero as possible. You may also want to open a new line of credit that gives you additional available credit which isn’t being used, thereby lowering your ratio or increasing your credit limit and making as many micropayments as possible.

  • Examine the credit of your customers and vendors

Working with vendors or customers with good creditworthiness speaks well of your business. It also helps your business to run smoothly and encounter fewer problems with its credit score. Your small business would benefit from having positive trade references from other businesses you engage with, and it is advisable to add these references and payment experiences to your credit file. When you need to apply for a loan, having a good number of positive payments on file would aid your chances of success.

Your business’s credit score is vital to securing favourable loan options for your business to advance and scale upward. It is an important aspect that should be considered while running operations. Even if your credit score is not looking its best at the moment, do not fret or feel overwhelmed. With these steps, you can actively improve it. A good credit score, amongst other factors, is a requirement for loan application with us at BizNurture, visit our website to get started and more.


BizNurture provides solutions that alleviate the funding problem by providing funds at reasonable rates to businesses that have difficulties accessing tradition