business credit score

If you’re having trouble accessing the credit you need, your business credit score could be to blame.

By Rieva Lesonsky

Are you feeling optimistic about your company’s prospects for 2016? You’re not alone. According to a recent survey of small and midsized businesses, more than eight in 10 small business owners anticipate their companies will do better financially this year than in 2015.

As a sign of the growth, two-thirds of small business owners in Dun & Bradstreet and Pepperdine University’s 2016 Economic Forecast expect to hire at least one employee in the coming year; in fact, one-fourth of respondents say they plan to hire between three and 10 employees. In addition, 51 percent of small business owners say they gave their employees a pay raise in the last 12 months, and more than 60 percent plan to give workers raises in the coming 12 months.

It’s not just employees who are enjoying financial gains: Forty-six percent of small business owners say they personally made more money in the last year than in the previous year, and almost three-fourths expect to make more money in 2016 than they did in 2015.

However, there is one dark cloud on the horizon that could cast a shadow on small business owners’ sunny prospects. Limited access to capital is one of the three biggest barriers to growth for 2016, cited by 28 percent of small business respondents. Increased access to capital was named the number-one change that would spur job growth in the coming year.

The study didn’t delve deeper into what specific difficulties the survey respondents are having accessing capital, so it’s hard to offer suggestions for improvement. However, if you’re having trouble getting the capital you need, one factor that might be holding you back is your business credit score.

For a newer business, a limited credit history can be a big stumbling block in getting traditional business loans. To help build your business credit score quickly, start by making sure that your company’s suppliers and vendors are reporting your payments to credit reporting agencies. Not all do this automatically, and if they aren’t, even making payments on time will not help build your credit history, so you may need to specifically request your suppliers report the information.

You can also improve your business credit score by making even small purchases using business credit cards that report to business credit reporting agencies and making your credit card payments in full and on time. Again, not all business credit card issuers will report to business credit reporting agencies; choosing a card that does will help you improve your credit rating.

Just as with your personal credit history, it’s also important to make sure your business credit history is complete and accurate. Every year, be sure to obtain a copy of your business credit history and review it for errors or omissions. If there’s anything wrong, take steps to correct it before applying for a loan.

If you have legitimately run into problems that have negatively affected your business credit score, it may take a while to improve your credit rating. Be patient and keep working at it. If problems occur in the future, don’t hide your head in the sand. Creditors will always appreciate efforts to make things right. At the first inkling that you may have trouble making payments, reach out to your creditors to let them know and see if you can work out some type of payment plan. This can go a long way toward maintaining and/or repairing your credit score.

Do what you must to get your business credit score and other financials in top shape. Whether or not you need business financing now, doing so can only benefit your business.