A new year or even a new month can be a great time to tackle tasks you’ve been putting off— including working on your business credit. If you’re a small business owner who wants to bring clarity to your company’s credit profile, here’s how to clean it up.

First, Assess the Job

1. Know what a good business credit score is

When it comes to cleaning up your business credit, you can start by carefully reviewing your business credit reports to make sure all information is accurate and complete. (You can get your free business credit report summaries from business credit reporting agencies Dun & Bradstreet, Equifax and Experian through Nav.)

As part of this review, you’ll want to check your business credit scores to help understand your business’s creditworthiness. Unlike personal credit scores that typically range from 300-850, business credit scores often use different ranges or scales. For example, FICO’s Small Business Scoring Service (SBSS) uses a scale of 0-300, while Experian’s Intelliscore Plus ranges from 0-100. 

Your business credit scores are calculated differently by each major credit bureau. They typically evaluate factors like payment history, credit utilization ratio, length of credit history, and public records. Making on-time payments is particularly crucial – even a payment that’s just a few days late may show up on your business credit reports, and potentially impact your scores.

Credit utilization, which measures how much of your available credit you’re using, can be another factor. Try to keep your utilization below 30% of your total credit limits.

Here’s what else to look for when you check your business credit reports:

Check your business details

Check your business name, address, and phone number listed on your credit reports. If your business is a legally incorporated entity, or you have filed a fictitious name (DBA) with your state, you’ll want to make sure the full legal business name is listed correctly on your business credit reports. 

Review your business SIC/NAICS code

Your business credit report will likely list one of these codes, which is a government code designed to categorize businesses by type of business. You want yours to be accurate for a couple of reasons. First, business credit scores can compare businesses within the same industry and if your business is not categorized correctly it may not be properly evaluated. Secondly, lenders may finance certain types of businesses and not others; you don’t want yours excluded from financing opportunities due to a mistake.

Next, Clean Up

3. Scrutinize payment history

Whether your business pays its bills on time is the single most important factor in your business credit scores. But business credit reports list payment history on individual accounts differently than consumer credit reports.

On personal credit reports you’ll see month-by-month payment history for the most recent 24-months along with a summary for the entire reported account history. With business credit, you’ll often see a summary of the entire account payment history listed as the percentage of time the account has been paid on time, or has been late. So it may be confusing to try to figure out when any late payments occurred. But if you believe the payment history listed on your credit report is wrong, you can dispute it and ask the credit reporting agency for a correction or try to contact your creditor for clarification.

4. Review public record information

If your credit report lists items such as UCC filings, tax liens or even judgments, you want to check to make sure that information is accurate and complete. One thing to look for is whether the current status is reported. For example, if you have paid off a tax lien it should indicate there is no balance.

If you’ve satisfied a debt underlying a UCC filing you want to make sure that it is no longer reported as open. If any public record information is wrong, you can dispute it with the credit reporting agency. (Note: there is no time limit that negative information may be reported; instead commercial credit reporting agencies make their own determinations.)

5. Know your personal credit scores

Many lenders and credit card issuers will check your personal credit when you apply for a small business loan, especially if your business is young or doesn’t have strong business credit. 

This is especially true for most SBA loans and traditional bank loans, where good personal credit scores often significantly improve your chances of approval and help you secure better interest rates.

Most major credit bureaus, including TransUnion, Equifax, and Experian, maintain separate files for your personal and business credit. However, some financing options use a blended credit score. For example, the FICO SBSS score (which ranges from 0-300) can incorporate both personal and business credit data. This score is particularly important because it’s used by many lenders, including some popular SBA loans..

Understanding the connection between personal and business credit can help you make strategic decisions about your business finances. For instance, if your business credit isn’t strong enough to qualify for a traditional business loan, you might need to rely on your personal credit to get an initial business line of credit. And many of the best business credit cards require good personal credit and a personal guarantee. 

A combination of good personal credit gives you more financing options while you build your business. Just remember – whether you use personal credit or business credit, maintaining a positive payment history and keeping your credit utilization ratio low are key to maintaining good credit scores.

6. Get all business accounts organized

Business credit reports are part of your business financial profile. Creating a clean line between your business and personal accounts will help you build a strong profile.

This means having a dedicated business bank account, separate business credit cards or charge cards, and clear records of all your business credit accounts, loans, and vendor relationships. A messy mix of personal and business expenses can make it harder to track your business’s cash flow and may raise red flags if you try to apply for a business loan.

Create a master list of all your credit accounts and payment obligations. Include every business credit card, line of credit, vendor account, and small business loan. For each account, track important details like credit limits, current balances, payment due dates, and whether they report to business credit bureaus. This helps you monitor your credit utilization ratio across accounts and helps you understand whether you’re getting credit for all your on-time payments. 

Some accounts may not be reporting to credit bureaus at all – identifying these gaps gives you the opportunity to either switch to vendors who do report or explore services (like those listed below) that can help report your payment history.

Set up a system to track your payment due dates and automate payments whenever possible. Late payments can be particularly damaging to business credit scores, often more so than personal credit scores. Even payments just a few days late can affect your business credit profile. 

Consider setting payment due dates in your calendar 5-7 days before they’re actually due to give yourself a buffer. Also, maintain digital or physical copies of all account statements, loan documentation, and payment confirmations. This organization becomes invaluable if you need to dispute any inaccuracies in your credit file or when applying for additional business funding.

Then, Spruce Up

After you’ve cleaned up, it’s time to spruce up. This is the business credit version of creating curb appeal: you’ll want to make your credit report look attractive to lenders, insurance companies and other companies that review business credit reports and scores. Here are several steps you can take to do that:

7. Add vendor accounts

If you don’t have many accounts listed on your business credit report— many small businesses don’t— adding a couple of accounts can help build a stronger credit rating. Vendor accounts offer one of the simplest ways to build credit for your business.

When you’re approved with one of these companies you’ll be able to purchase products and pay for them later, often on net-30 terms. (Here are several vendor accounts that don’t require personal credit checks or personal guarantees.) Pay them on time to build out your business credit.

8. Get a business credit card

A small business credit card can help build business credit as well. It also helps to separate business and personal credit and makes it easier to keep track of business expenses.

Most business credit cards are available to startups, as long as you have strong personal credit. If your personal credit isn’t strong, check out these business credit cards for bad credit.

It’s not unusual to discover that not all your payments appear on your credit reports. You may be able to get some of them added to your credit history by using a service like eCredable Business Lift to verify and report those accounts. You may be able to get up to two year’s worth of payment history reported for certain accounts, such as internet, power and cell phone accounts that you use for your business. Plus your subscription will be reported to all major commercial credit reporting agencies.

9. Dispute inaccurate business and personal credit issues

Since your credit scores are only as accurate as the information in your credit reports, you’ll want to make sure your reports don’t contain incorrect information. 

For personal credit issues that affect your business creditworthiness, follow the standard dispute process under the Fair Credit Reporting Act (FCRA). Credit bureaus make it easy to file a dispute online, or you can mail your request for an investigation. You should hear back in less than 30 days, and if the information can not be confirmed with the source, the credit reporting agency must stop reporting it. 

Business credit reports don’t fall under the same requirements for how disputes are handled, but generally the business credit bureaus will investigate disputes in a few weeks, and either remove or correct the wrong information. 

Keep records of your disputes, and follow up if they aren’t fixed within a few weeks. Depending on the errors in your credit reports, this process could be somewhat time-consuming, the potential impact on your ability to get a business loan makes it worth the effort.

Nav Can Help

Nav can help you track your business and personal credit in one place, get matched to funding options based on your business data, and track your cash flow in real time. Understand where your business stands now, and what you need to do next. 

FAQs

How to clean a business credit report? 

Cleaning up your business credit report starts with a thorough review of your credit reports from all major credit bureaus. Follow the steps outlined above: verify your business information, scrutinize payment histories, and check that balance are accurate.

Remember that business credit cleanup is an ongoing process. It’s a lot easier if you monitor your business credit profile and address issues as they arise rather than waiting for problems to accumulate.

How to get something removed from a business credit report? 

Each business credit bureau has its own dispute process. If you have it, gather supporting documentation that proves the information is incorrect, such as payment records or updated public records. Submit your dispute through the bureau’s official channels, and be prepared to follow up. Keep in mind that accurate negative information typically cannot be removed until it ages off your report naturally.

How do I fix my bad credit score asap? 

While there’s not usually an instant fix for bad business credit, you can take immediate steps to improve your scores. Start by bringing any past-due accounts current and lowering your credit utilization across all accounts. Consider adding new tradelines that report to credit bureaus, as positive payment history is crucial for good credit scores. 

Focus first on factors that heavily impact your scores, like payment history and debt. Remember that building good credit takes time, but on time payments often help.

Is there a way to wipe your credit clean? 

There’s no way to instantly “wipe clean” your business credit history, and beware of any service that tries to charge you for that. Even if you start a new business, the credit bureaus may be able to associate a previous and new business through the owners.  

Instead, focus on legitimate methods to improve your business credit: dispute mistakes, establish new positive payment history with tradelines, and pay on time going forward. Remember that most negative but accurate information will eventually age off your reports, while you continue building positive credit history.