How Much Do Tradelines Affect My Business Score?

Business Credit Score
Table of Contents

Credit tradelines are any accounts that appear on your credit report. They usually fall under mortgage accounts, installment accounts, revolving accounts, and open accounts. Seasoned tradelines are those tradelines that have an established payment history. Those with a longer payment history are deemed more valuable towards your commercial credit score.

Tradelines can have a big impact on determining your business credit score. This is because they record your consumer behavior and are the most commonly reported items on your credit report. 

Business credit bureaus gather information about your business tradeline credit. They use this information to generate a report about your company’s business credit transactions. This report determines whether you are granted credit and for what amount.

How Do Tradelines Affect My Business Credit Score?

Business credit scores range anywhere from 0 to 100 with any score above 75 considered excellent. Tradelines are useful in helping businesses to build positive credit experiences. They provide business credit bureaus with information on how they have previously transacted with business credit. 

However, businesses are not required to submit their tradeline information to business credit bureaus. This means that many businesses don’t and, thus, lose out on gaining a better credit score.

It is quite possible that credit bureaus may receive little to no information on your business credit transactions. This means that your business could be generating years of positive credit experiences without any of it being reported.

Many business owners make the mistake of using their personal information to apply for business credit. It is important to associate with companies that will establish credit for your business without using your personal credit information. Then, report those positive credit experiences to business credit bureaus. This will help to boost your business credit score.

The most important factor is for your business to maintain a good credit history in order to earn a great business credit score. 

Factors That Can Affect Your Business Credit Score

  • Missed payments
  • Late or delayed repayments of debt
  • Liens, judgments and/or collections on your business
  • High credit use
  • High outstanding balances
  • Too few years in business operation
  • Errors in the business credit report

In terms of real estate, many American business owners offer to lease their office or storefronts to other businesses. For many of those commercial tenants, their rental payments do not contribute towards building their credit score. This is because they are not submitted for consideration by the landlord. 

Landlords appear to have control over their tenant’s credit history. They are in a position to improve their tenant’s business credit score. But, many landlords choose not to report positive credit experiences from their tenants. 

In a similar fashion to online reviews, landlords may only report their tenant’s rental payment activity in instances where it would negatively impact their tenants.

Commercial tenants are disadvantaged by this lack of reporting as they incur avoidable bank costs. Usually, commercial rental payments in America are coupled with bank fees. These could easily be avoided through accurate reporting to the business credit bureau.

Building A Better Credit Score

You can boost your business credit score by ensuring that your business credit tradelines are well maintained and used responsibly. These tradelines include business lines of credit, business loans, business credit cards, and credit accounts with individual suppliers.

Your business can boost its credit score by:

  • Making payments in advance or on time
  • Avoiding liens, judgments and/or collections
  • Using credit sparingly
  • Maintaining low outstanding balances
  • Identifying errors in your business credit report

Using a dedicated online platform is also a useful way for commercial tenants to build a better credit score. By using a platform like Debie, tenants can report their commercial rental payments as tradelines. These go directly to business credit bureaus so that you are in control - not your landlord. This is completely legal (unlike purchasing tradelines). 

This system is cost-effective, easy to use, and doesn’t need the landlord’s consent for submission. Debie provides a seamless platform for commercial tenants to build a strong business credit score. It also gives them access to market offers such as lower costs on leasing of office spaces, storefronts, or commercial vehicles.

The Bottom Line

Building a strong business credit profile is a goal that all business owners should aspire to. Receiving a favorable report from the business credit bureau can help open up enhanced financing for your business. It also helps you to avoid risky personal guarantees when your business needs credit. 

Establishing positive tradelines is crucial in building a better credit score. Always remember to act responsibly and maintain positive tradelines for your business to flourish!

Put your Rent to Work, Start
Building Business Credit Today!