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Your Business Credit

How to check a small business’s credit report

Each credit bureau offers free tools to check your business credit; here’s how to use them

Summary

Staying on top of your business credit regularly is key for scoring access to financing, low interest rates and growth opportunities for your business.

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Dear Your Business Credit,

I’ve been working on building my small business credit and would like to check my small business credit score to see if my efforts are moving the needle.

Can you tell me how I can do this? – Michelle

Dear Michelle,

Congrats on taking charge of your business credit score! You’re wise to check it regularly, so you know where you stand.

Building credit for your business cannot only give you better access to financing when you need it, but also help you qualify for lower interest rates.

Check out all the answers from our credit card experts.

Ask Elaine a question.

See related: 6 ways to maintain a good credit score

Business credit: Use free tools to check your score

There are several credit bureaus that track business credit: Dun & Bradstreet, Experian and Equifax. Each has a free search tool you can use to check whether they are actually tracking your business.

What if you find your business is not being tracked? That is the case for many small businesses.

Often, when people start a business, they have to rely on their personal credit at first to get credit cards. Banks require them to personally guarantee their credit cards and loans. As a result, these business owners may end up with a well-tracked personal credit profile but no real financial footprint as a business.

How to build business credit

There is a remedy for this: Start showing that you and your business are financially separate. Open a business bank account if you don’t have one. Use your business checking account to pay bills, and make sure to manage it wisely.

To get a business bank account, you will generally need a federal tax ID for the business. The credit bureaus will use this number to identify and track your business. D&B issues a D-U-N-S number to track your business. To get one, apply on its website.

Use business cards to build business credit

Other ways to build business credit include taking out a business credit card and using it for business purchases, if you are not doing so already. Some small businesses will also establish credit with stores they use regularly, such as big box hardware stores or office supply stores.

Regardless of what steps you take, use each opportunity as a chance to prove you pay your bills on time. Make sure not to max out your credit or you could end up with a lower credit score than you would like.

Bear in mind that it can take time to build business credit, and for the first few years – or more – lenders will still rely heavily on your personal credit score to determine whether to lend to you or not. That means you need to be just as scrupulous about your personal credit.

Build a strong financial foundation for your business

One way to avoid putting too much strain on your finances as you grow it is through bootstrapping. That means funding your growth through cash flow.

Rather than rushing out to buy the things you need for the business, see if you can wait until you bring in enough money from sales to pay for them. This takes patience but can help you avoid racking up the kind of debt that gets to be overwhelming, and hurts your credit in the end.

Using credit sparingly but very responsibly will allow you to build strong business and personal credit without the risk that comes with financing your entire business on credit cards.

What’s up next?

In Your Business Credit

Affordable cards that even consumers with average credit can get

If you don’t have good-to-excellent credit, it may seem all but impossible to find a competitive card that doesn’t charge exorbitant fees or interest rates. But a small number of competitive cards welcome a wide range of cardholders, including consumers with less-than-perfect credit.

Published: September 13, 2019

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