Good business credit can open doors, making it easier for your business to qualify for small business loans and other types of financing.

But it can also close doors by making it more difficult to get financing, supplier credit and even certain business opportunities. 

If you check your business credit reports and find delinquencies (late payments) or other negative information, what should you do? Learn your options here. 

What Is a Good Business Credit Score?

There’s no single number that represents a good business credit score. While most consumer credit scores range from 300—850, business credit scores often have different ranges. Here are a few popular ones:

Intelliscore Plus from Experian

76 – 100 (Excellent): Lowest Risk

51 – 75 (Good): Low – Medium Risk

26 – 50 (Fair): Medium Risk

11 – 25 (Bad): High – Medium Risk

1 – 10 (Very Bad): Highest Risk

Dun & Bradstreet PAYDEX

80 – 100 (Good): A score of 100 means your payments come 30 days soon than your terms specify. 80 indicates on time payments.

50 – 79 (Fair): A 70 indicates that you are paying 15 days late. A score of 50 indicates you are 30 days late.

0 – 49 (Bad): 40 or less means your payments are coming 60 days or more past the due date.

Let’s review the factors that go into business credit ratings: 

Payment history: On-time payments on credit accounts and loans positively impact a business’s credit rating, while late payments or defaults can hurt your credit scores. 

Credit utilization: Here the credit scoring models compare the business’s outstanding credit balances to the available credit limit or highest balance. A lower credit utilization ratio can help credit scores. .

Credit history length: Having an older credit history (if it’s positive) can help build credit. 

Public records: Negative public records, like bankruptcies, judgements, tax liens, or collection accounts, can result in a bad credit rating.

Industry risk: Some industries are considered riskier than others. Business credit reports may contain industry codes like NAICS or SIC codes.

Can You Repair Business Credit?

You can repair business credit, but the process is often different than with personal credit. 

When it comes to personal or consumer credit reports, a federal law called the Fair Credit Reporting Act requires credit reporting agencies to verify information that has been disputed, or stop reporting it if it can’t be verified.

There is no similar law that covers business credit reports. We’ll explain how that affects the dispute process in a moment. 

How Do I Repair My Business Credit After Late Payments?

There are two approaches to building business credit. One is to dispute negative information like late payments in the hope they will be removed. 

The other approach is to focus on building positive credit references to demonstrate an on-time payment history. 

Accounts on business credit reports are typically called “tradelines”. 

There are a number of types of tradelines that can help you build credit, including: 

• Net-30 vendors
• Business credit cards
• Business charge cards
• Credit builder loans
• Alternative tradelines
• Small business loans
  • Business lines of credit
  • Bank loans
  • Equipment financing
  • Commercial vehicle loans

Tradelines can be a great way to establish credit or rebuild credit after delinquencies so focusing on them can often have a positive impact on your business credit rating. 

What Specific Steps Should I Take to Address Delinquencies on My Business Credit Report?

If you find delinquencies on your business credit reports, the first thing you should understand is how business credit reporting is different from consumer credit reporting when it comes to late payments.

Late payments don’t typically appear on personal or consumer credit reports unless you miss a payment by a month or more. 30-days late is the shortest delinquency that appears on personal credit. 

Business credit reports, however, report repayments as “DBT” or “days beyond terms”. This is the number of days a business pays its bills past the invoice due date. 

If your business has net-30 terms with a supplier, for example, and you pay the invoice on day 33, the payment is 3DBT. That means that even payments of a few days late can impact your business credit scores. 

A few days of delinquencies will not ruin a businesses’ credit history. But severe delinquencies or a pattern of delinquencies can lower your business credit scores and make your business appear riskier to creditors. 

So let’s get back to what you should do if you find delinquencies on your business credit report:

If you believe there is inaccurate information on your credit report, such as late payments, you have two choices:

1. Contact the creditor reporting the late payment(s) to try to find out why they are reporting the account as late, and to determine if there is a way to resolve the problem with them directly. 
2. Dispute the late payments with the business credit bureau. While there’s no legal requirement that the bureau investigate inaccuracies within a certain period of time, most will try to resolve disputes in a reasonable amount of time.

It’s worth noting that sometimes simply disputing an account will result in the removal of the entire account from the credit report. If this happens, it will remove any positive payment history as well as negative information. 

If you find delinquencies that are inaccurate, you could try to dispute them with the understanding that they may not be removed and that if they are, the entire account may disappear. 

Or you can focus on getting positive tradelines to help outweigh the negative information. 

How Long Do Late Payments Stay on Your Business Credit Report?

When it comes to consumer credit, credit reporting agencies must stop reporting negative marks like late payments or collection accounts after 7 years. There is no similar requirement for business credit. As a result, negative information can be reported for as long as the credit bureau choses.

Learn more about how long late payments appear on business credit reports here. 

Does My Business Credit Affect My Personal Credit?

Even though some of the major credit bureaus like Experian and Equifax collect both personal and business credit data, business credit and personal credit are kept in completely separate databases.

That means your business credit generally won’t affect your personal credit. However, some loans require business owners to sign a personal guarantee. If you don’t repay a business loan or credit card and signed a personal guarantee, the lender reserves the right to report it to personal credit.

And here’s another twist: there’s a business credit score called the FICO SBSS score. That score can take into account information from the owner’s personal credit, as well as business credit, to create this score. 

The FICO SBSS score range is 0—300, with the higher number representing lower risk. 

SBA Small Loans require the lender to prescreen the application using a FICO SBSS score. The current minimum SBSS score for 7(a) Small Loans is 155. Lenders who use the FICO SBSS score often prefer a credit score of 160 or above. 

How Do Credit Repair Companies Work?

Credit repair companies will often help individuals or small business owners understand the types of information that may be hurting their creditworthiness. They then typically dispute negative information, regardless of whether it is accurate. 

Credit repair services may also recommend building credit through secured cards, credit builder loans, or other products. 

While credit repair services can help save time and help individuals who feel overwhelmed with the process of fixing their credit profile, they may or may not be able to deliver results. And there are many steps you can take on your own, such as building positive tradelines. 

The FTC warns against potential credit repair scams that may involve illegal tactics so be careful. 

How Can I Check Business Credit? 

You can purchase copies of your credit reports from the major business credit bureaus. 

Or for a simpler solution, use Nav Prime. Get detailed insights on your business through Detailed Credit Reports with tradeline reporting that can grow your business credit and improve your financial health profile

The majority of customers that use Nav tradeline reporting at least a year continue to see positive business credit score changes*

*Based upon the aggregate percentage of Nav customers with positive score changes, nearly 75% of customers continue to see positive business credit score changes across business credit bureaus by keeping their Nav tradeline at least a year.