Planning to Apply for Business Credit? 3 Guidelines for Success

Applying for business credit may be as simple as entering your information into an online form or filling out a hard application; but how can you improve your chances of approval?

Getting approved for business credit requires proper planning that should start way before you apply for business credit. It’s important to educate yourself beforehand and know where your credit stands before you apply.

As a business owner, whenever you request credit from a bank, lender, supplier, vendor or retailer, you’ll have to go through the business credit application process. When you apply they will check your credit scores and pull your credit report.

Depending on the credit grantor, a credit report may be checked on the business owner as well as the business itself. To help you better prepare, here are three guidelines for success before you apply for business credit.

Better Your Credit Scores – The better your personal credit scores, the better the credit limit, repayment terms and interest rate you’ll receive. You’ll also be more likely to get offers such as 0% intro APRs on purchases, balance transfer offers, low interest rate cards, etc.

One way to improve your credit scores is to reduce the individual and overall credit utilization on revolving credit card accounts. Ideally, before applying for business credit, your credit utilization ratio on active cards should be at or below 50%.

For example, if you have a credit card with a $10k credit limit and an outstanding balance of $8k then you’re at 80% credit utilization. Dropping the credit utilization on this card below 50% will have a positive impact to your scores and may produce more favorable results when you apply for business credit.

Check Your Personal Credit Reports – Prior to applying for credit it’s crucial to order your personal credit reports to ensure the information reporting is accurate and up to date. You’re legally entitled to one free credit report per year. To get a free copy of your annual credit report go to

If you identify any information that is inaccurate you should submit a dispute letter to the credit reporting agency requesting an investigation. Credit reporting agencies are required to investigate a dispute and upon completion, the credit reporting agency must provide you the results in writing.

Check Your Business Credit Reports – Similar to personal credit reports, business credit reports are compiled by three major business credit reporting agencies. Each business reporting agency issue business credit scores and company reports that enable lenders, suppliers and vendors to measure the credit risk and creditworthiness of a business.

To obtain your business credit report you will need to conduct a company search on each business agency’s website using your company’s name along with the state and country where it does business. Once you have located your listing you can order a report directly from that agency.

Review your company report to ensure all the information reporting is correct. Remember, a business credit report is a report card on the financial health of your business. It impacts your business in many ways, such as the amount of credit suppliers will extend to you and the interest rates you'll pay.

When you apply for business credit it’s crucial that you have an understanding of the terms and conditions outlined in the application. While building business credit takes time and patience, it’s well worth it. Follow these three simple guidelines prior to applying for credit for your company so you can improve your chances of approval.

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