If you have a business, your credit score can make or break your business. It demonstrates how effectively your business manages finances, especially when it comes to paying bills and handling debt.

Let’s break down what your business credit score means, why it matters, and what you can do to improve it.

What Is a Business Credit Score?

A business credit score is a rating that reflects how reliable your company is when it comes to paying bills and managing credit. It’s similar to a personal credit score but focuses only on your business finances.

In Canada, credit reporting agencies like Equifax and TransUnion track this information. In the U.S., companies such as Dun & Bradstreet (D&B), Experian, and Equifax handle it.
Scores usually range from 0 to 100; the higher the number, the lower the financial risk you appear to lenders.

A score of 80 or higher is considered strong. Anything below 50 may raise concerns.

How Does a Business Credit Score Start?

When you first start a business, your score starts at zero. You build it by:

•  Registering your business
• Opening accounts with suppliers or lenders
•  Get an EIN (Employer Identification Number) from the IRS
•  Open a business bank account
•  Apply for a business credit card
•  Pay bills early or on time
• Monitor your score with bureaus like Dun & Bradstreet or Experian
• No activity = no score. It’s like starting with a blank slate.

Why a Good Business Credit Score Matters

A healthy business credit score does more than make you look good on paper. It saves you money and gives your company more flexibility. Here’s how:

• Easier Loan Approvals: Banks and lenders are more willing to give you financing if they trust you’ll pay them back.

• Lower Interest Rates: A good credit score means lower risk, and lower risk translates to better loan terms.

• Better Supplier Relationships: Many suppliers check credit before extending payment terms. With strong credit, you can often negotiate better deals.

• Business Growth Opportunities: When your finances look stable, investors and partners are more open to working with you.

• Protection for Personal Finances: Building business credit separates your personal credit from your business credit. That’s essential for long-term stability.

A bad credit score does the opposite. You may still be approved for financing, but with higher interest rates, stricter terms, or shorter repayment periods. Some vendors may require upfront payments, which can slow your cash flow and growth.

Why Businesses Struggle With Credit

Many small business owners are unaware that they have a business credit profile. They start by using personal credit cards or personal loans to fund business expenses. That’s understandable at first, but it doesn’t help your business establish its own credit history.

Other common reasons business credit suffers include:

• Late or missed payments

• High credit utilization (maxing out lines of credit)

• Lack of credit accounts in the business’s name

• Errors or outdated information on credit reports

• Closing old accounts that could have strengthened credit age

How to Improve Your Business Credit Score

Improving your business credit score takes time, but it’s completely doable. Here’s the step-by-step approach I recommend:

1. Check Your Business Credit Report

Start by pulling your report from major credit bureaus. Please review it carefully for any errors, old accounts, or incorrect information. If you notice anything unusual, file a dispute immediately.
Your business credit report should be accurate, current, and fully reflect your payment history.

2. Separate Business and Personal Finances

If you haven’t already done so, open a business bank account, obtain a business credit card, and register for a business number.
This separation helps you track spending clearly and ensures your business builds its own financial footprint.

3. Pay Every Bill on Time

Nothing improves credit faster than paying your bills on time. Even one late payment can hurt your score, especially with suppliers or lenders who report to credit agencies.
Set up auto-pay or reminders to stay on top of things.

4. Lower Your Credit Utilization

Try to use less than 30% of your available credit.
For example, if your line of credit is $10,000, try to keep your balance under $3,000. This demonstrates to lenders that you manage credit responsibly and don’t rely too heavily on it.

5. Work With Vendors Who Report to Credit Bureaus

Not all vendors report your payments—but the ones that do can help you build credit faster. Ask your suppliers if they report to credit agencies. If they don’t, consider adding one or two that do.

6. Add Positive Credit Accounts

If you have a limited credit history, consider applying for a small business credit card or a vendor account with a low spending limit. Use it for regular purchases and pay it off every month.
This builds consistent positive activity.

7. Keep Old Accounts Open

Length of credit history matters. Don’t close old accounts just because you don’t use them often. They demonstrate to lenders that you have long-term experience in managing credit.

8. Monitor Your Score Regularly

Set a reminder to check your credit every few months. This helps you spot changes early and address problems before they escalate into larger issues.

The Long-Term Benefits of Strong Business Credit

Building good business credit is like laying a foundation for your company’s future.
When you have a solid score, your business becomes more resilient. You’ll have more borrowing options when you need them. You’ll qualify for better insurance rates. You’ll even look more credible to clients who do background checks before signing contracts.

Most importantly, good credit gives you control.

Improving your business credit won’t happen overnight. But every positive step, every on-time payment, and every accurate report add up.
Think of it as building your business’s financial reputation, because that’s precisely what it is.

Your business credit score is more than a number. It reflects your financial discipline, consistency, and commitment to growth.
If your score isn’t where you want it to be, start working on it today. Get organized, pay on time, monitor your accounts, and give your business the strong financial reputation it deserves.

Good credit doesn’t just help you borrow money; it allows you to build a business that lasts.

Canadian Resources for Building Business Credit

• Get a D-U-N-S Number (Dun & Bradstreet Canada)
• Equifax Canada – Business Credit Reports
• BDC – Understanding Business Credit Scores
• CRA – Register for a Business Number (BN)
• Corporations Canada – Register Your Business

Check out this article: https://masteringpersonalfinances.com/2025/06/06/financial-mistakes-5-solutions/