Three Ways to Build Your Business Credit Report

Credit report

A strong business credit report is important to running a successful business. Traditional and even some non-traditional lenders use business credit reporting agencies such as FICO Small Business Scoring Service to determine a firm’s creditworthiness when evaluating an application for a loan. Yet because many woman and minority-owned businesses have limited access to credit, they also often have trouble building a business credit report — even when they have a history of promptly paying their debts.

Building a business credit score takes time and effort. But there are some ways to make the process a little quicker (if not easier). Here are a few shortcuts that can help.

Manually Add Credit References

Many small business owners have established credit lines with trade partners and pay their accounts on time. Yet, when these businessmen and women apply for a loan, they often come to learn that they have no credit information on file. The reason? Only about 6,000 of the hundreds of thousands of vendors and suppliers in the U.S. actually report their payment experience with their clients to a business credit reporting agency. 

If you find yourself in this position, you may be able to remedy the problem by working with Dun & Bradstreet — the only business credit reporting agency that allows customers to manually add items to their credit report. You’ll have to sign up for the company’s Credit Builder Premium service, which is currently offered at $199 per month. But doing so will allow you to add an unlimited number of trade references (with some exceptions) to your account. Examples of the kinds of references you can add include:

  • Accountants or CPAs
  • Attorneys
  • Equipment or car leasing
  • IT service provider
  • Furniture rental or purchase
  • Property management company 

You can’t, however, add traditional lenders such as banks and credit card issuers or companies located outside the United States.

Get Several Business Credit Cards

Almost all lenders that issue business credit cards submit data to credit reporting agencies. But if you have only one active card, it may take a while to build the kind of payment history and credit score that will help you qualify for a loan. A better strategy? Get several cards and use them on a regular basis and pay them all on time. (Note: You’ll have to have good personal credit to get the best cards.)

Another strategy you may want to consider is a service offered by Business Credit Builders, a Michigan-based company that offers credit-building advice. Open only to well-qualified clients with a personal FICO score of 690 or greater, the service provides you with a line of credit of up to $150,000 and four to five bank-issued business credit cards. The card issuers report only to business credit reporting agencies so your personal credit is not affected.

Report Merchant Processing Fees

Does your business accept credit card payments? If so, you are already doing business with a merchant processor, which charges you a fee. What you might not know is that many merchant processing companies report your on-time payments to one or more credit reporting agencies. So making on-time payments to any of these merchants can help build your business credit report as well. Call your processing company and ask them if they report your payment history. If they don’t, switch to a company that does. (Find a list of some of the more highly rated credit card processing companies here.

About Us

The Carmoon Group Ltd. is a full-service insurance broker located in Hicksville, New York. Our seasoned professionals have over 20 years of experience servicing the needs of businesses across the United States. We offer comprehensive insurance programs, risk management plans and access to capital to qualified businesses. Just give us a call today to schedule your free consultation with one of our staff. Or if you prefer, reach out online and we’ll get back to you as soon as we can.

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