How To Improve Your Business Credit Score

At SmartBiz®, we’re here to help small businesses access the financing they need—whether it’s an SBA loan, a Bank Term loan, or another option. When we chat with business owners who’ve successfully secured funding, they often share the same advice: focus on your business credit score. Keeping your score strong may open doors to better loan options and smoother approvals, setting your business up for growth and success.

What is the FICO® SBSS business credit score?

As a consumer, your personal credit score is important when shopping for a home mortgage, buying a car, or applying for a credit card. However, these personal credit scores don’t tell the full story of your business. The other score you need to monitor closely is your business credit score, also known as the FICO SBSS score.

FICO stands for the Fair Isaac Corporation, the largest and best-known of several companies that calculate credit scores. SBSS stands for the Small Business Scoring Service. This score helps lenders assess how likely your business is to make timely loan payments and repay loans in full.

Why is the FICO SBSS business credit score important?

When applying for an SBA loan through SmartBiz bank partners, your FICO SBSS score will be considered. This score is critical because it provides lenders with a clear snapshot of your business's financial reliability and repayment ability. A strong SBSS score may help you qualify for better interest rates and terms, increasing your options for funding. Additionally, this score plays a key role in financing decisions, often acting as a benchmark for your business’s creditworthiness.

How is the FICO SBSS score calculated?

Your FICO SBSS score is calculated by reviewing both personal and business credit histories. Other key factors include the age of your business, the number of employees, and financial data such as revenue and assets.

The SBSS score range is 0–300, with higher scores generally indicating lower credit risk. Typically, businesses with a score above 140 are more likely to qualify for loans, though individual lender requirements may vary.

Test your business credit score knowledge: Take our quiz Test Your Business Credit Score IQ to learn more about how your score is calculated and what it means for your business.

Why would you want to improve your business credit score?

Securing financing when you need it is essential for business success. Insufficient or delayed funding is generally the second most common reason businesses fail​. Your business credit score is a public measure of financial health, so establishing business credit early may help position you for long-term success.

A solid credit profile may allow you to secure better loan terms, negotiate flexible payment periods with suppliers, and demonstrate your financial responsibility to potential partners or investors. Ultimately, building good business credit is about creating opportunities and reducing risks, empowering you to grow and adapt as challenges arise.

How can you establish your business credit?

A big part of improving your credit score is establishing business credit in the first place. Business owners of all stripes may establish their business credit via the following steps:

Formally establish your business entity

Before you launch your business, you’ll need to be sure that your company is registered and listed in all official directories. To do so, you must obtain several business licenses and permits. Learn more via the SmartBiz Loans® blog Where To Apply For Business Licenses and Permits and How To Do It.

Create business banking accounts

A key tenet of all sound business finance and credit advice is never to mix and mingle your personal and business money. That’s why opening business banking accounts is generally important for establishing your business credit. Depositing your business earnings solely in your business accounts and using this money to cover your expenses typically makes it easier not to miss credit payments. As a result, your business credit score will likely increase.

Obtain business identification numbers

Just as your personal credit score is linked to your social security number, so too is your business credit score tied to a government identifier. This identifier is known as your Employer Identification Number (EIN), and your business must obtain this federal ID before starting operations. Sole proprietors and freelancers may also want to obtain EINs so that any failure to repay business credit doesn’t affect their personal credit scores.

Another business identification number worth obtaining is a Data Universal Number System (DUNS) number. The commercial credit bureau Dun & Bradstreet® oversees the DUNS system and uses DUNS numbers to predict your company’s finances. As such, businesses with DUNS numbers may find it easier to borrow money.

Seek funding from lenders who report your payments to the credit agencies

To prove that you’re a trustworthy borrower, you need the commercial credit bureaus to obtain proof that you pay on time. You may provide this evidence while obtaining business financing by borrowing money solely from lenders who report your payments to the credit bureaus. This way, you simultaneously grow your business and open it to future growth opportunities.

Regularly check that your business information is accurate

Since every commercial credit bureau works differently, the information you’ve shared with one bureau may not always appear on your profile with another. You can help ensure informational accuracy by regularly checking your information with all bureaus and updating it as needed. Don’t be shy when adding information – typically, the more context and data you can provide, the better lenders will understand your business and its needs.

13 Ways to Improve Your Business Credit Score

If your business credit score needs work, consider these 8 tips to help strengthen yours.

Check your business credit report regularly

Many business owners are familiar with checking their personal credit scores, but knowing where to find your business credit score is just as important. Regularly reviewing your business credit report may help you catch errors or discrepancies that might negatively affect your ability to secure financing. Learn where to check your business credit score and take action if you find inaccuracies. Dispute any errors promptly, as incorrect information may impact your business’s financial health and access to opportunities.

There remains some debate among financial experts on how often you should check your business credit report. Some experts say that checking once a year is fine, whereas others suggest quarterly or monthly checks. No matter how often you choose to check, your business credit score won’t be affected – contrary to popular belief, credit scores don’t go down every time you check them.

Report incorrect information

When you pull up your business credit report, there's always a chance that you’ll find incorrect information that damages your credit score. You can report this information to the three commercial credit bureaus, each with its own reporting process. Through this process, you may correct your credit history, payment history, and other factors that influence your interest rates for your small business loans, business credit cards, and business insurance.

Pay your bills on time

This step is a no brainer. Lenders or vendors don’t want to work with a business that drags their feet when paying bills. Consider these tips to help avoid paying late and incurring penalties.

• Make a list of every bill
• Find out when your payments are due
• Add your payments to a calendar
• Decide how much you want to pay
• Set up automated payments whenever possible
• Devise a system for manual payments
• Sign up for reminders

If you can’t make a timely payment, see if you can negotiate so your business isn’t reported to the credit bureaus.

Decrease your credit utilization ratio

Credit utilization is an important metric that reflects the ratio of your credit card balances to your credit limits. As The Balance explains, this ratio measures how much of your available credit you’re using. For instance, if your balance is $300 and your credit limit is $1,000, your credit utilization rate would be 30%. A lower credit utilization rate is generally better, as it demonstrates responsible credit usage and may positively impact your credit score.

Use more credit

Although it’s best to keep your credit utilization ratio low to improve your business credit, you can’t establish business credit without using credit in the first place. Regularly using credit and making timely payments demonstrates reliability to lenders and credit bureaus. To avoid setbacks, only use credit for purchases you’re confident you can repay on time. Late payments or overextending your resources may harm your business credit score. By balancing responsible credit use with disciplined repayment, you’ll be better positioned to build and maintain a strong credit profile.

Establish credit accounts with suppliers

If you work with vendors or suppliers, you may build your business credit by opening accounts with them. Before you do, make sure they report payments to credit bureaus. That way, your timely payments will be reflected on your credit reports, and lenders will have access to them.

Add positive payment experiences to your credit file

The credit card issuers and lenders you work with regularly report updates to credit bureaus, including details like your current balance, payment history, and other relevant information. These updates help shape your credit report, which is then used to calculate your credit score when requested by businesses—or even by you.

It’s important to know that not all monthly bills, such as phone, cable, or insurance payments, are routinely reported to credit bureaus. While paying these bills on time doesn’t usually boost your credit score, falling behind may have consequences. If these payments become significantly overdue, they may appear on your credit report as negative marks, which could hurt your efforts to build a strong credit history.

Building positive credit takes time, so remember to stay consistent and patient. Regular, on-time payments and responsible credit usage may steadily improve your credit profile over time.

Dispute any errors and inquiries

If it’s been a while since you last reviewed your business credit report, now is a great time to do so. A Wall Street Journal® survey found that 25% of small business owners who checked their reports discovered errors that placed them in higher-risk categories—potentially affecting their ability to secure financing.

Unlike personal credit reports, business credit reports aren’t protected by the Fair Credit Reporting Act, which means inaccuracies may go unnoticed without regular monitoring. If you find errors, reach out to the major credit bureaus—Experian®, Equifax®, and Dun & Bradstreet (D&B)—to request corrections. Addressing inaccuracies promptly may help safeguard your business’s financial reputation and access to funding.

Avoid closing accounts

Paying off and closing old credit cards may unintentionally lower your business credit score. These cards often represent a positive credit history, and closing them may erase the good years of credit that have contributed to your current score. To maintain your credit standing, it’s generally best to keep old credit cards open, even if you’ve paid them off. Closing accounts may reduce the length of your credit history and negatively impact your score, so consider keeping them active unless absolutely necessary.

Fix your personal credit

Some lenders check both your personal and business credit, so it’s important to keep your personal credit score high as well.  A FICO personal credit score—developed by the Fair Isaac Corporation—is a three-digit number based on detailed information about your credit history. While this score typically affects personal financing needs like car loans or mortgages, it may also play a significant role in your ability to qualify for a business loan.

Your personal credit score reflects your creditworthiness and indicates to lenders the risk of extending credit to you. Essentially, it helps answer the question: How likely are you to repay the money you borrow? Since many lenders consider your FICO score first when assessing creditworthiness, maintaining or improving it is critical. Keep in mind that inquiries on your credit report may temporarily lower your score, so plan accordingly.

The good news is that you may improve your score over time with proactive steps:

• Pay your debts on time and as agreed, including credit cards, car payments, mortgages, and business loans.
• Use your credit cards regularly but pay the balance in full each month to avoid carrying debt.
• Keep your credit utilization low by staying well below your credit limits.
• Open new credit accounts only when absolutely necessary to avoid unnecessary hard inquiries or increased debt obligations.

By consistently following these practices, you may strengthen your personal credit score and improve your chances of securing financing for your business.

Deal with any judgments, liens, or other black marks on your report

Address any judgments, liens, or other negative marks on your credit report promptly. Most derogatory items, such as late payments, defaults, collections, and foreclosures, are typically removed from your credit history after seven years, as required by credit reporting agencies. If you notice any black marks on your report, take action to dispute inaccuracies or work toward resolving valid issues. Proactively addressing these items may help improve your credit profile and demonstrate financial responsibility to lenders.

Keep revolving debt low

Revolving debt, such as credit card balances, is a common and convenient way to access credit. When used responsibly, it may be a valuable tool for managing cash flow and building credit. However, keeping your monthly balances low is crucial, as it reduces your credit utilization ratio—a key factor in your credit score. By maintaining discipline in how you use credit and avoiding high balances, you may improve your business’s financial health and creditworthiness.

Stay in compliance in terms of business taxes, business licenses, insurance policies, and others

Most small businesses need a combination of licenses and permits from both federal and state agencies. The requirements — and fees — vary based on your business activities, location, and government rules. Learn more from the SBA.

Some types of insurance are also required. Most businesses generally need to purchase at least the following four types of insurance: Property Insurance, Liability Insurance, Business Vehicle Insurance and Workers Compensation Insurance. For additional information, review this post from the SmartBiz® Small Business Blog: Types of Small Business Insurance.

Establish and increase your FICO SBSS Business Credit Score

A strong FICO SBSS score is a key component of your business’s financial health. It may open doors to better financing opportunities, favorable loan terms, and stronger relationships with suppliers and lenders. Establishing and maintaining a good score takes time, but the benefits—such as improved cash flow and greater flexibility—are generally worth the effort.

Focus on building credit early, using it responsibly, and keeping your financial records accurate. Regularly monitor your credit report to catch any inaccuracies that might impact your score. Over time, consistent financial habits and proactive management may help your business achieve the stability and growth you’re striving for. Remember, a strong credit profile isn’t just about securing funding—it’s about creating a foundation for long-term success.