Hi, my name is Ben and I’ve been in the small business credit industry for several years now. My career as a Small Business Loan advisor has given me an insider view of several aspects not seen by many.
I have been given the opportunity to share some aspects of the small business credit industry here on Credit-Facts.com.
Today we will be discussing facts about your small business credit score. Below are the need to know “Credit-Facts” I will be explaining in this article today…
- What’s a Small Business Credit Score
- How do I check my Small Business Credit Score
- Small Business Credit Score Monitoring
- Tips to improve your Small Business Credit Score
What’s a Small Business Credit Score?
In my career as a loan advisor, the one thing that surprised me the most is the amount of Small Business owners that didn’t even know about the FICO® SBSS℠ Score.
Credit-Fact – FICO® SBSS℠ Score stands for “Fair Isaac Corporation – Small Business Scoring Service”.
The FICO® SBSS℠ Score is the service banks and lenders use to check a Small Business’ credit score. It determines the risk possibility the business owner will be more than 90 days delinquent on a loan.
For several years banks have been using the SBSS without Small business owners’ knowledge. Online information about the FICO® SBSS℠ Score wasn’t available or was just hard to find.
How do I check my Small Business Credit Score?
Like most other hard to find information, online sites have made Small Business Credit Scores available to us within seconds. Today you can check personal and business credit scores online from your home, office or smartphone.
There are plenty of online sites that provide you with a look at your small business credit report. I will briefly mention a few sites that you can check out along with some of their features…
- Experian – Business Credit Report
- CreditSignal – by Dun & Bradstreet
- Nav – Personal and Small Business Credit Scores
Small Business Credit Score Monitoring
Subscribing to a Credit Monitoring service for your personal and small business credit score is always good advice.
A credit monitoring service can help you improve your score by alerting you of any changes on your credit report, as they appear. On your report, you will be able to find areas of improvement as well as dispute incorrectly reported information.
By improving your personal and business score you can save tons of money on interest rates. You will also have more financial products available to you when you need it most. Even government backed SBA loans have a minimum credit score requirement.
Whether you’ve already applied or looking to apply for a loan, you should always work on improving your credit score.
Tips to Improve a Credit Score
Finally, I will include some Tips to improve your credit score. You can apply these tips to improve your personal as well as you small business credit score.
I have divided up the credit score improvement tip into 2 categories; Long-term tips and Short-term tips.
Short-Term Credit Score Improvement tips
Applying for loans and paying them back on time works for both categories. But you need to be careful of having too many open accounts. Too much debt will do more harm than good to your credit score.
You need to find a balance between your income and your loan payments. If you can manage them successfully, you will see the results in no time.
Related – How to get approved for a Short-Term Small Business Loans
Working with a Credit Repair specialist is a great way to start improving your credit. They can take the hassle of finding discrepancies and filing disputes for you.
It’s faster than trying to figure out where to send your dispute. Some companies can also provide you with your actual FICO score and report, with more accurate and detailed information.
You might want to avoid this tip if you are planning on applying for a loan in the foreseeable future. Credit Repair companies tend to raise flags with banks and lenders.
Long-Term Credit Score Improvement tips
Now Long-term methods to improve your credit score are broader and more general. You won’t see results immediately, but they can have a huge impact in the long run.
The best tip I can provide you with is reviewing your Credit Report. Regular credit report reviews are highly underestimated. Outdated and incorrect information on your credit report might be the main reason your score is lower than it should.
You want to go through it with a fine-tooth comb and look for any discrepancies. You should dispute any incorrect information as soon as you find it. Doing so usually takes time, but the benefits can be worth it.
Another tip to improve your personal or business credit score is to hold on to your cash and use a credit card when possible.
When buying day to day items, be sure to charge them on your credit card instead of paying with cash or debit. Paying for gas at the pump, or lunch during the day, using your credit card can do wonders in the long-term.
It goes without saying, this can be a double edge sword. If you’re late on a payment, not only will you hurt your credit score, but you will also have to pay the interest on your purchases.
Comment below on your experiences with your small business credit score. Provide us your feedback if you would like to see other related topics reviewed.
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