Business credit scores are vitally important for your business.

They can define your company’s financial reputation, so understanding and managing your business credit score is essential for success.

Often used as an indicator of a company’s “financial health,” business credit scores are most commonly used to help lenders decide if a company can take on additional financial obligations, and if it will likely pay those obligations on time.

Lenders review credit history to determine whether or not to fund a loan or line of credit, as well as the interest rates and repayment terms if a loan is extended. Consumers and businesses with good credit often qualify for loans with lower interest rates and better payment terms than those with poor credit.

What influences your business credit score?

There are a number of factors that could influence your business credit score either positively or negatively. Those main factors include, but are not limited to:

  • BACKGROUND: INDUSTRY, SIZE, TIME IN BUSINESS
  • PAYMENT HABITS AND BALANCES OUTSTANDING
  • NUMBER OF CREDIT INQUIRIES OR APPLICATIONS
  • COLLECTIONS, LIENS, JUDGEMENTS, BANKRUPTCIES

How can a small business loan from Credibly help build your company’s business credit score?

SHOWING PAYMENT RESPONSIBILITY

Paying off financial obligations according to the agreed-upon terms is the first and most important step in establishing a good business credit score. If a business pays the Credibly loan on time, it can strengthen their business credit profile by showing that the business is managing its payment obligations responsibly — and thereby positioning itself as a better credit risk for future lenders.

INCREASING TRADE ACTIVITY

When a small business lender like Credibly reports payment history to Experian, it can help build and improve a business credit profile by providing additional trade activity.
All business accounts — not just loans, but also recurring expenses like utilities and leases — should be established in the company’s name, and business owners should also ensure that their business vendors report their payment history to a business credit agency.

We recommend that small businesses regularly monitor their business credit score for risk changes, and proactively manage it to maintain the lowest risk potential. Small business owners can do so easily by visiting www.experian.com/businesscreditreport and subscribing to Experian’s Business Credit Advantage monitoring service. And when you’re ready to apply for working capital from Credibly, start here.