How to keep your business’s credit score high?

Financial Support
21 May 2018

As a SME, you build your empire with lot of sweat and blood. Everything that you do as an owner of your SME, is with the singular focus and intention of making your SME grow further and larger in terms of revenue and the market size.

For SMEs, it’s not an easy task though. In the whole jugglery to manage the clients, suppliers/vendors and internal workforce (be it blue collared, white collared or a combination of both); many a times SMEs end up ignoring their business’s credit score rating.

For that, let’s first understand what is a business credit score rating. Business credit score is something similar to your personal credit score. Like in the personal credit score, where the credit reporting agency calculates your personal credit score with a combination of multiple factors like your credit card bills and loan EMI’s monthly payments etc.. In the same manner, in business credit score, your SME/business’s creditworthiness is calculated based on various factors like outstanding balance, records of past trade, payment history etc. SMEs should tssrget a score towards 1000 to raise easy credit.

But, what’s the whole fuss around having a high business credit score?

Let’s say today you are starting your small company, and operating out of your home’s backyard. But as you grow bigger, you may need to secure finances to grow your SME business even larger. To be able to secure finances, you need to have a good business credit score.

Even if you don’t have a great business credit score, you don’t need to sweat about it. There are few simple tips; if followed diligently, can help you lift up and better your business credit score.

So, let’s find out the ways, with which you can maximize your business credit score.

  1. Check your business’s credit score – Well now, that’s an obvious one, isn’t it? First thing is to find out the current business credit score rating of your SME. You may ask for your business credit report from any one of the renowned agencies like CIBIL, CARE, EXPERIAN, ICRA by paying a certain fee. Once you have your business credit report in your hand, now it’s easy to work on those factors which might be pulling down your credit score.

  2. Timely bills payment – This is the easiest one to start off, for increasing your business credit score. Paying bills in time before the due date, is a necessity to have the continued services and will also help you in improving your business credit score.

  3. Don’t make the wrong move of closing accounts – Sometimes you may decide to close certain credit accounts, as they have been paid off, but it’s actually a wrong move. As a business unit, you may have put in so much effort in the past months or years to manage that accounts balance and pay off bills etc. Closing that account means you are nullifying the credibility that you had built for that account; which otherwise would have helped add points to your business credit score.

  4. Fix errors in business credit score report – This is one of the simpler yet very critical way of improving your business credit score. At times, the credit rating agency may end up putting incorrect spelling of the name of your company or wrong address details. It’s very important that as a business owner of your SME, you get these small errors fixed at the earliest with those agencies. Also, always get the latest information of your SME updated in your business credit score report, by working with the respective credit rating agency.

  5. Avoid risky or hasty decisions – this is another important factor that can affect your business credit score heavily. You must avoid any dealings with other dicey companies with hazy or dubious history, as it will only affect your business credit score negatively. Similarly, you and your SME must not indulge in any such financial activity/event that may put off your business credit score in the credit rating report negatively.

Other points that underwriters look for:

  • Balanced credit usage: keep yours debts at minimal. You must keep an active tab at the credit used to credit available ratio. A healthy range is having less than 30% of this ratio. Then maintain this hygiene on weekly/monthly basis.

  • Duration of default: just in case you are not able to make timely payments, in that case at least try and minimize the duration of default. Your default tenure on the product type has implication on your credit application. For eg: 30 days of credit default on a short term loan has bigger implication on your short term loan application than 45 days of default on your personal credit card bill.

The bottom-line is that, there are ways and means to amend your business credit score by following the above mentioned simple techniques, and by working closely with the credit rating agencies; and you will surely be able to move up your business credit score. As your business credit score improves, your eligibility to secure finances from external agencies becomes stronger. At OfBusiness, we work towards helping the SMEs in India grow further by offering them unsecured business loans. Submit your credit application today and enjoy better growth opportunities for your SME.

Reach out to us at 1800-102-9586 or mail to

Not sure which loan to go for?
Not sure which loan to go for?
Unlock your loan potential with our expert guidance! Let us evaluate your needs and suggest the perfect loan options tailored just for you.
HomeBlogsHow to keep your business’s credit score high?