By Gerri Detweiler
Between changing tariffs, fluctuating sales and sagging consumer sentiment, a lot in your business is out of your control.
Here’s one thing you can control: monitoring your business credit. You can check your business credit reports and make sure they are accurate.
Not sure it’s worth your time? Keep in mind that the data in these business credit reports can help your business credit directly impact your ability to secure financing, manage seasonal cash flow, and even land more lucrative government contracts and commercial orders.
First, let’s look at the problems you may find on your business credit reports, then I’ll offer solutions.
Hidden credit report errors cost you money
Business credit reports can contain mistakes. It’s not uncommon for business credit reports to get mixed up with those of other businesses with similar names. Wrong information can lead to inaccurate credit scores, and to missed opportunities. Common mistakes include:
Missing vendor payment history
You’ve faithfully paid your equipment suppliers and parts distributors for years, but those payments aren’t showing up on your credit reports. Unfortunately, not all industry suppliers report to business credit bureaus. This missing info creates an incomplete picture of your payment reliability, potentially making your business appear less creditworthy.
Zombie UCC filings
UCC (Uniform Commercial Code) liens are commonly filed with the courts by lenders or financing companies when you get secured financing or equipment loans. They aren’t negative per se, but sometimes they can appear that way.
For example, let’s say you paid off an equipment loan years ago, but the UCC filing still appears on your credit reports with no information that it has been paid off (terminated). This makes it look like business assets are encumbered.
These zombie UCC filings can block new financing opportunities and increase your borrowing costs when you need capital for inventory or expansion. Left uncorrected, these outdated filings suggest your business has less available collateral than it actually does.
Incorrect industry classification
Industry classification codes such as NAICS or SIC codes were created for government tracking purposes, but lenders often use them to help determine which businesses they will offer financing to.
If your business is misclassified under an inappropriate SIC or NAICS code, your business can appear in a higher risk category than warranted. This misclassification can affect how lenders view your business and potentially increase your borrowing costs.
Your NAICS and SIC codes should represent the main source of revenue for your business. Review options at Census.gov and reach out to them if you aren’t sure which code is right for you. Codes get updated as industries evolve, and there are hundreds of unique business codes.
Account ownership confusion
Similar business names or changes in structure can result in misattributed accounts. You might find accounts that don’t belong to your business on your credit reports, or missing accounts. This confusion creates an inaccurate credit profile that might not reflect your true payment history and business performance.
Tip: If you’re in the early stages of your business, or planning to form an LLC, pick a business name that’s not too similar to others. Get an Employer Identification Number (EIN) and use it when applying for credit.
Seasonal business pattern misinterpretation
Credit algorithms may flag your normal seasonal fluctuations as financial instability. Many businesses in landscaping and outdoor power equipment industries operate on seasonal cycles, with predictable peaks and valleys throughout the year. This characterization of your business patterns can increase your risk profile and lead to higher financing costs precisely when you need seasonal capital.
Your action plan to clean up credit errors
Unlike personal credit, business credit reports aren’t as standardized as consumer reports. The process of checking your credit reports and challenging mistakes may feel different than what you may be used to as a consumer.
Still, you can take steps to identify and correct the most damaging issues.
Step 1: Get your complete business credit reports
There are three major business credit bureaus: Dun & Bradstreet, Equifax, and Experian. (The latter two have both consumer and business credit divisions. Make sure you’re looking at business credit.)
Examine your reports for accounts that don’t belong to your business, late payments you actually made on time, UCC filings for paid-off equipment loans, incorrect information, and missing positive payment history.
Tip: You can purchase reports from individual credit bureaus, or use a centralized source like Nav to get multiple credit reports and scores. That approach can save you time and money.
Step 2: Document everything
For each error you find, save or print the incorrect information. If possible, gather proof of the correct information, such as payment receipts, loan satisfaction documents, and business registration papers.
Step 3: Contact each bureau separately
Each bureau has its own dispute process that you must navigate independently. Dun & Bradstreet requires accessing your account at DNB.com and using their dispute form or contacting customer service. For Experian, visit BusinessCreditFacts.com and complete their business information profile update form with all supporting documentation. Equifax requires submitting disputes through their business credit dispute form with specific details about each error and copies of supporting documentation.
Step 4: Follow up
Business credit bureaus have no legally mandated timeframe to respond and may require multiple follow-ups. Typically, they take two to four weeks to process disputes, and corrections can fall through the cracks.
Check the status of each dispute every two weeks until it is resolved.
Step 5: Address industry-specific issues
If your credit report lists UCC filings that are not updated, contact the original lender (such as the equipment finance company) and request they file a UCC termination amendment.
If that is not possible because you can’t find or get in touch with the company that filed it, follow up with the secretary of state where the UCC was filed and ask how to update that information.
When dealing with missing payment history, contact major suppliers and ask if they can or will report to business credit bureaus, or consider establishing accounts with suppliers that do report. Some vendors will provide a credit verification letter upon request, and while that won’t help your business credit, it may be useful to other suppliers. (D&B also offers a paid service that will add manually verified accounts.)
For issues related to seasonal business patterns, make sure your bookkeeping and tax filings are up to date so you can provide proof of your business income.
Pro strategies for stronger business credit
While correcting errors, implement these industry-specific strategies to strengthen your profile:
Establish tradelines
When shopping around for suppliers or service providers, ask whether they report to credit bureaus. Not all do.
While credit reporting may not be the sole criteria for choosing providers, let them know it’s important to you. Building relationships with vendors that report to business credit creates a stronger foundation for your business credit profile and helps demonstrate consistent payment behavior over time.
Monitor UCC filings proactively
When paying off equipment loans or lines of credit where a UCC lien was filed, specifically request UCC termination filings and verify that it has been completed.
Don’t assume lenders will automatically clear these filings — some don’t. Set a reminder to check public records 30 days after paying off any secured debt to ensure the filing has been properly terminated.
Use business credit cards for regular expenses
Fuel, parts, maintenance items and other ongoing expenses charged to business credit cards that report to business credit bureaus can help build your profile. Most small business credit cards report to at least one of the major business credit reporting agencies.
Pay these balances on time or early to establish a pattern of responsible credit management.
Make credit monitoring part of your routine
Maintaining accurate credit reports is an ongoing process. Monthly or quarterly credit report reviews should become part of your financial routine, especially before seeking new financing or entering peak seasons.
The time you invest in monitoring and maintaining your business credit can pay off in better financing costs and credit availability. Strong business credit is another tool to help provide the financial flexibility your business may need to weather challenges and capitalize on opportunities for growth.
Gerri Detweiler serves as Education Consultant for Nav, a financial health platform that helps small businesses owners build and manage credit, track cash flow patterns, and understand their financing options.