How to Improve Your Credit Score as a Small Business Owner

Let’s talk credit, specifically, how to improve your credit score when you’re running a business. Whether you’re looking for funding now or just trying to get your financial house in order, this is one of those areas where small, consistent action pays off. Because even if you’re not actively seeking a loan today, your credit score is shaping what opportunities are available to you tomorrow.

Credit scores might seem like a behind-the-scenes detail, but they carry serious weight. They influence your ability to secure financing, lease equipment, open vendor accounts, or even land certain clients. They’re also one of the fastest ways banks, lenders, and vendors assess your financial credibility, so if you’re ignoring them, you’re playing with fire. Thankfully, improving your credit score isn’t about gaming a system. It’s about building habits and processes that align with good financial management, both personally and professionally. And yes, both your personal and business credit scores matter. Let’s break it all down.

Understanding the Two Sides of Credit

First, a quick primer. Most small business owners have two credit profiles: personal and business. Your personal credit score (FICO, VantageScore, etc.) typically ranges from 300 to 850 and reflects how well you manage consumer debt, think credit cards, auto loans, mortgages, and personal lines of credit. Your business credit score, managed by agencies like Dun & Bradstreet, Experian Business, and Equifax Small Business, operates a bit differently. It evaluates your company’s financial reputation, including payment history with suppliers, credit utilization, and public records like liens or bankruptcies.

Here’s the part most owners miss: until your business is large enough or mature enough to stand on its own credit legs, your personal credit is still tied to your company’s financial footprint. In other words, if your personal credit isn’t in good shape, it could limit your ability to grow, borrow, or build relationships with vendors. The goal? Strengthen both.

Step One: Review Your Reports for Accuracy

The first place to start if you want to improve your credit score is with your credit reports. You can’t fix what you haven’t seen. Request your personal report from AnnualCreditReport.com, it’s free once a year from each of the three major bureaus. For your business, you’ll need to check directly with Experian, Equifax, and Dun & Bradstreet, as access may come with a fee.

What are you looking for? Errors. Things like duplicate accounts, incorrect balances, outdated information, or even accounts you didn’t open (which could point to identity theft). Dispute anything that doesn’t look right. Removing one inaccurate late payment could boost your score dramatically.

Step Two: Pay On Time, Every Time

This is the cornerstone of any solid credit strategy. The single biggest factor in both personal and business credit scores is payment history. Late payments stay on your record for years and are a red flag for anyone evaluating your creditworthiness. The fix is simple: automate what you can. Use reminders or software tools to ensure bills are paid before they’re due, not after. Even if you’re waiting on a client payment or juggling cash flow, making the minimum on time is better than missing the deadline altogether.

For business accounts, this includes paying vendors on schedule. If a vendor reports to a business credit bureau, on-time payments will help you build positive credit. If they don’t report, ask them to start. It may require a little legwork, but it’s worth it.

Step Three: Keep Your Balances Low

Credit utilization, the ratio of your credit card balances to your credit limits, is another key player in your credit score. For personal credit, aim to keep your usage below 30%. That means if you have a $10,000 limit, try not to carry a balance above $3,000. For business credit, the same logic applies. Carrying high balances month after month, even if you pay them off eventually, can signal risk to lenders and hurt your score.

One trick? Request a credit limit increase. If you’re using $2,000 on a $5,000 limit, your utilization is 40%. But if you can get that limit bumped to $10,000, your utilization drops to 20%, without changing your spending. Of course, don’t use that higher limit as an excuse to rack up more debt. The goal is strategic breathing room, not extra temptation.

Step Four: Establish and Separate Business Credit

If you haven’t already, start building a business credit profile that’s separate from your personal one. That means getting an EIN (Employer Identification Number), registering your business with the appropriate agencies, and opening a business bank account and credit card. Use that card exclusively for business expenses, and keep it in good standing. Over time, this builds a financial identity for your business that isn’t tethered to your personal credit. The more you separate your finances, the stronger both profiles can become.

Keep in mind that business credit bureaus don’t operate with the same level of transparency as consumer bureaus. They may collect data without your knowledge, and not all vendors report your payment activity. You can be proactive by choosing vendors who do report and by establishing credit lines specifically for building your business score, like net-30 supplier accounts or small business credit builder tools.

Step Five: Don’t Close Old Accounts Unless You Have To

One of the lesser-known credit score tips is to keep older accounts open. The age of your credit history plays a role in your score, and closing long-standing accounts can actually cause a temporary drop. If a card doesn’t carry an annual fee and you’re not using it for anything risky, leave it open. It’s helping your score just by existing.

Step Six: Stay Informed and Flexible

Credit isn’t static. It’s constantly shifting based on your financial habits and reporting cycles. That’s why one of the best things you can do is keep learning and keep checking in. Monitor your score monthly if possible, and be proactive about addressing any red flags before they turn into real problems. This doesn’t have to be overwhelming. Start by blocking out 30 minutes each quarter to review your credit activity and update any changes to your vendor or banking relationships.

Even if you’re not applying for a loan right now, keeping your score strong means you’ll be ready when the time comes. That’s true whether you’re considering expansion, purchasing equipment, negotiating terms with a new supplier, or trying to get through a slow season without burning through your reserves.

Why Credit Still Matters, Even If You’re Not Borrowing

One of the biggest misconceptions is that credit only matters when you’re applying for a loan. But in reality, your credit score can influence far more than just interest rates. Vendors may offer better terms to businesses with strong credit. Insurance providers may calculate premiums based on financial risk. Some landlords even run credit checks before leasing commercial space.

Strong credit is also a signal. It shows that your business is well-managed, that you understand your numbers, and that you’re reliable. That kind of reputation builds trust with investors, banks, and partners, and that’s something money can’t buy.

Where to Go From Here

If you’re feeling overwhelmed, you’re not alone. Many small business owners are so focused on sales and operations that they don’t realize their credit is holding them back until they hit a wall. But this doesn’t have to be a solo mission.

Working with a financial advisor or a fractional CFO service like North Peak Services can help you create a strategy that includes credit as a core part of your business planning. These experts can help you set up better systems, automate your payments, create realistic budgets, and build the kind of financial infrastructure that supports long-term success.

The key takeaway? You don’t have to be perfect. You just have to be intentional. Because when you commit to improving your credit score, you’re really committing to improving the health and resilience of your business. And that’s the kind of move that always pays off.