Dissecting A Good Business Credit Score - The Factors That Affect It

Dissecting A Good Business Credit Score – The Factors That Affect It

A high credit score is critical for businesses looking to secure loans, lines of credit, and other financings. Even a minor dip in your business credit score limits the chances of getting the funding you need when you need it the most. So what factors go into determining your business credit score? And how can you make sure yours is as strong as possible? This blog post takes a closer look at the key factors and provides tips on how to improve them.

What is a Good Credit Score?

Your journey toward improving your business credit score starts by understanding what a good score looks like. Generally, a credit score beyond 700 is considered excellent, while anything below 600 is considered poor. A higher business score means you’re more likely to be approved for loans and lines of credit.

What Factors Affect Your Business Credit Score?

Several factors influence your business credit score, including:

Credit Worthiness

Your credit history and repayment history determine this. The better you’ve managed your finances in the past, the higher your score will be.

Credit Utilization Ratio

This is the amount of debt you have compared to the amount of credit available. A high ratio indicates that you’re using a lot of your available credit, which can be a red flag for lenders. Try paying all pending loans to improve this ratio.

Credit Capacity

A credit capacity determines whether a business can repay a loan or line of credit: the higher your credit capacity, the better. Try reducing expenses and increasing your revenue to improve your credit capacity.

Payment History

Lenders inspect your payment history when determining your credit score. A history of on-time payments improves approval chances, while late or missed payments will hurt it.

Invested Capital

Another factor that lenders consider during a business loan evaluation is the sum you’ve invested in your business. The more you’ve invested, the less risk there is to the lender. To improve your chances, try increasing the funds invested.


You can sell commercial real estate, equipment, heavy machinery, and other expensive business assets if you fail to repay your loan. This makes secured loans much safer for lenders, which is why they often offer better terms.

Business Conditions

In addition to your personal and business credit scores, lenders will also consider the overall conditions of your industry. Getting approved for a loan may be challenging if you’re in a high-risk industry. To increase your chances of approval, try to find a lender specializing in loans for your industry.

We’ve broken down the factors that make up your business credit score so you can work on improving it. Are you ready to open new doors for your business in Allentown? Trifecta Credit Solutions offers the ultimate credit solutions, opening new business avenues for you. Get a free consultation from our team today.

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