In today’s competitive environment, maintaining a solid business credit profile is crucial for the growth and sustainability of your business. With over 5.5 million new business applications filed nationwide in 2023, the competition for resources and attention has never been more intense. Access to credit can be the deciding factor between business expansion and stagnation. Maintaining a strong business credit score is essential in securing capital and continued growth. Keep reading to find out how to understand and optimize your business credit profile.

What is Business Credit and How is it Used?

Business credit encompasses a company’s financial health and ability to repay debt, distinct from personal credit and linked to the business rather than its owners. Credit reporting agencies collect business credit data and create scores used by various entities.

Many entities including banks, lenders, communication providers, utility companies, and insurance providers – may review your business credit. Maintaining good business credit is important when planning to do business with these entities.

Benefits of Good Business Credit

1. Access to Capital: Business credit is vital for securing financing. Lenders and investors will assess your business credit profile to determine risk. A strong credit score increases your approval chances and can help you secure better terms and interest rates. Access to capital can be crucial to a business’ success. If you’re a Monmouth or Ocean County NJ small business, check out First Financial’s range of Business Loans that can be tailored to meet your needs for a customized lending solution.
2. Vendor Relationships: Good business credit can lead to favorable terms with suppliers and vendors, such as extended payment periods, discounts, and improved relationships, demonstrating financial reliability.
3. Insurance Premiums: Your business credit profile can influence insurance premiums. A good credit score may help you secure lower premiums, reducing overall operational costs.
4. Business Expansion: Financing is often needed for expansion, whether opening new locations, launching products, or investing in equipment. A positive business credit history facilitates these growth initiatives.
5. Competitive Advantage: A strong business credit profile can enhance your reputation with vendors, potential partners, and investors – giving you a competitive edge.

Optimizing Your Business Credit

Understanding and optimizing your business credit is a critical step toward achieving financial success and stability. Accessing and comprehending your business credit reports and scores allows you to make informed financial decisions, secure better financing terms, and foster positive relationships with suppliers and vendors. Actively managing your business credit can pave the way for growth opportunities and a stronger market position.

Recommendations for Optimizing Business Credit

1. Check Your Business Credit Reports: Obtain your business credit reports from major credit bureaus.
2. Review Your Score for Accuracy: Ensure your scores are accurate and complete, and promptly dispute any inaccuracies.
3. Monitor Your Score: Regularly monitor your business credit score to track changes, either through subscription services or periodic checks.
4. Establish Credit Relationships: Open business credit accounts such as the First Financial Visa Business Cash Plus Credit Card and use them responsibly.* Timely payments and responsible credit utilization positively impact your business credit score.
5. Pay Bills on Time: Ensure you make timely bill payments, including loans, invoices, and credit card balances. Late payments can significantly harm your business credit.
6. Build a Strong Credit History: Consistently manage your finances, avoid over-leveraging, and demonstrate responsible credit management to build a strong credit history over time.

Understanding and managing your business credit is a strategic move that can shape your business’ future. A strong business credit profile opens doors to financing, vendor relationships, and competitive advantages essential for growth and success. Let First Financial guide you in building and monitoring your credit today, to ensure you’re prepared to grow and maintain your business now and in the future.

To learn more about business banking with First Financial, email business@firstffcu.com, call 732-312-1500, or visit one of our branches.

Disclosures:

*This APR of 18% is for purchases, balance transfers, and cash advances and will vary with the market based on the Prime Rate. Subject to credit approval. Rates quoted assume excellent borrower credit history. Your actual APR may vary based on your state of residence, approved loan amount, applicable discounts and your credit history. No Annual Fees. Other fees that apply: Balance Transfer and Cash Advance Fees of 3% or $10, whichever is greater; Late Payment Fee of $35, $10 Card Replacement Fee, and Returned Payment Fee of $35. A First Financial membership is required to obtain a Visa® Business Cash Plus Credit Card and is available to anyone who lives, works, worships, volunteers, or attends school in Monmouth or Ocean Counties. A $5 deposit in a base savings account is required for credit union membership prior to opening any other account/loan. Your First Financial Visa® Business Cash Plus Card will earn cash back based on your eligible purchase transactions. The cash back will be applied to your current credit card balance on a quarterly basis and be shown cumulatively on your billing statement. Unless you are participating in a limited time promotional offer, you will earn 1% cash back based on eligible purchases each quarter. uChoose Rewards is a registered trademark of Fiserv Inc. Login to uChoose Rewards through Online Banking, by clicking on your Cash Plus Credit Card account to view current offers.