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After the economic downturn in 2008, banks tightened their lending requirements for small business loans and other lines of credit. A report by the American Sustainable Business Council shows that 61 percent of small business owners have experienced increased difficulties in getting approved for a loan, compared to their experiences prior to 2008. You aren’t going to walk into a bank and come out with a huge line of credit without proving you can handle business credit. Here are six ways of getting your business credit rating up, so you get access to all of the funding sources you need to be successful.

1. Shore Up Your Personal Credit

When you first apply for business credit, some lenders require a personal guarantee to back up your line of credit, according to Mashable. If you want to get qualified for the best small business credit, you need to start things off by allowing your personal credit to speak for you.

2. Separate Your Personal and Business Finances

If you don’t have any business experience, you might think that co-mingling your funds is no big deal. However, it creates difficulties in accounting, and leaves your personal funds vulnerable in the event of bankruptcy or a lawsuit. Incorporate your business and apply for an EIN to separate your business entity from your personal self.

3. Don’t Wait Until You Need Funding to Get Funding

Entrepreneur recommends applying for lines of credit before you absolutely need them. You don’t have to use them, however. One of the major factors in business credit scoring is how long you’ve had an active credit file. When you have accounts that are established months or years before you need them, you build your business credit history. If you cannot qualify for any sort of unsecured business line of credit, offer some form of collateral to the lender, such as a savings account for a secured loan or credit card.

4. Avoid Putting all of Your Eggs in One Basket

You might really like the bank that holds your business checking account and lines of credit, but what happens if they are purchased by a larger bank or drastically change their small business lending policies? You don’t want to rely heavily on a single financial institution, as that introduces a lot of vulnerability.

5. Get Your DUNS Number

Business credit is not reported to the same bureaus that consumer credit is. One of the major credit reporting bureaus for businesses is Dun & Bradstreet. According to USA Today, it’s free to sign up for a D&B number, and once you create your business profile, your business credit information is tracked.

6. Pay Your Bills and Get Paid on Time

Just like personal credit, late payments greatly impact your business credit score. If you have a history of late payments, you are going to have a hard time finding lenders and vendors who are willing to extend credit. To make sure you get paid on time (so you can pay your bills on time) set up easier invoicing and payment options for your customers, such as Intuit merchant payment services. Keeping financial records and invoices organized and track will help you organize and set financial goals.


Search for Small Business Loan Sources and receive your matched lender list
AND received FOUR free Business eBooks worth $39.95!
Search for Small Business Loan Sources