Business Credit Reporting: Everything You Need to Know as a Small Business Owner


Personal credit is a common topic in the financial space, but how much do you know about business credit?

As a small business owner, your business credit score is just as important as your personal credit score. Business credit reporting highlights your financial history and risks. It is crucial to secure financing for your small business and helps you and your partners and bankers make informed business decisions.

Business Credit Report Basics

A business credit report is used by lenders, banks, and suppliers to assess the creditworthiness of a small business. It contains information about the company's (and its owners’) payment history and contractual obligations to show whether you have a history of making payments on time. Offering small business financing comes with some risk, and a business credit report helps bankers and lenders be aware of the risks and opportunities of each business.

The report also contains the following information:

  • Basic company information, including incorporation details, contact information, owners, subsidiary details, and number of employees
  • Financial details, including annual sales and financial statements
  • Operational data, such as the number of locations or customers
  • Public filings, including judgments, liens, bankruptcies, UCC filings, and other legal records
  • Payment and collections history, including outstanding balances and credit limits

Banks and lenders analyze the information in a business credit and issue a business credit score that predicts payment behavior. Think of a business credit report as a report card that grades your financial risk and proves to lenders that you are a reliable financing option. The better your score, the more credibility you have with suppliers, landlords, and other partners.

Unlike a personal credit report that is tied to an individual, a business credit report reflects the business as a whole. Your personal credit score can influence your business credit report, but the two are separate.

Major Credit Reporting Bureaus

There are three main business credit reporting bureaus: Dan & Bradstreet, Experian Commercial, and Equifax Small Business. Each agency has its own process for collecting and compiling data. Though the type of information they collect is similar, there may be some differences in credit scores between the bureaus.

4 Ways to Strengthen Your Business Credit Score

A strong business credit profile can make it easier to secure business loans, negotiate insurance premiums, or discuss payment terms with suppliers and landlords. As a small business owner, building your business credit score should be a priority because it is a marker of your creditworthiness and can unlock new opportunities for your business to grow and succeed.

Consider these four ways to build a strong business credit score:

  1. Register your business and secure an EIN. Choose an organizational structure for your business, such as an LLC, and file the correct paperwork for your area. Apply for an employee identification number (EIN) with the IRS so you can more easily secure a business bank account and other financing.
  2. Establish a history of timely payments. Payment history is one of the most influential factors in your business credit score. Work to make payments on time and get your financial obligations in order. The longer your history of on-time payments, the higher your business credit score.
  3. Open a business credit card. Just like being responsible with your personal credit card builds personal credit, the same is true for business credit cards. You don’t necessarily need a high credit score to secure a card, but it can act as a way to show you make payments on time. A business credit card can be the starting point to gain additional funding and showcase your creditworthiness.
  4. Partner with vendors and suppliers that report to a business credit agency. Not all vendors are created equally. As you purchase supplies on credit and secure partnerships, look for vendors that report to a business credit reporting agency. Online and bank business loans typically report to agencies, but most cash advance companies don't. The smaller purchases you make on credit with these suppliers can build reliability in your finances. Plus, these partnerships also work as trade references to build your case for better credit.

Did you know Fundbox reports payment activity to business credit bureaus? You can easily build credit in your business' name just by using your Fundbox Line of Credit.

Disclaimer: Fundbox and its affiliates do not provide tax, legal or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal, and accounting advisors before engaging in any transaction.

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