Why your business credit score isn’t going up — even if you’re paying on time

Building business credit can feel like running in place. You’re paying bills on time, managing expenses responsibly, and doing everything “right” — yet your credit score doesn’t seem to reflect your efforts. It’s a confusing spot to be in as a founder or operations lead, especially when your credibility with vendors, lenders, and partners depends on those numbers.

Understanding what actually influences your business credit score isn’t always straightforward, but it’s essential. Without clear insight into what really moves the needle, you could one day find yourself in financial hot water. 

In this article, we’ll break down the lesser-known factors that affect your score and share how to strengthen it so you can move forward with confidence.

Before we get into this, let’s set the stage: Several credit bureaus collect and sell data based on spending and borrowing habits. They compile that data into credit reports with a creditworthiness rating. Some of the leading bureaus include Dun & Bradstreet, Experian, Equifax, and TransUnion. Each bureau has their own way of evaluating a credit score. 

To improve your business credit score, you’ve got to focus on the levers that impact it. Here are the key variables you need to know that credit bureaus pay attention to: 

1. On-time payments

One of the strongest predictors of whether you can meet your financial obligations is your history of making on-time payments. Lenders and creditors pay special attention to this, so be sure to always make payments on time. If you can’t make the full payment, make the minimum payment that’s due. 

2. Mix of credit accounts

You can have different types of credit accounts, such as credit cards, installment loans, and mortgages. If you have too many or don’t have enough of a variety, it can impact your credit score negatively. It’s a delicate balance. 

3. Age of accounts

If you open too many new accounts at once, it shows creditors and lenders that you’re taking on a lot of new debt. Be mindful not to open more accounts than you truly need for your business. 

4. Credit utilization

A lower debt-to-credit ratio is important. If all of your accounts are close to the credit limit, it can mean that your business has taken on too much debt. Only borrow what you absolutely need. 

5. Public records and legal filings

If you’ve experienced any foreclosures, bankruptcies, judgments, liens, or delinquencies that have been reported to the credit bureaus, these can impact your credit score for a long time.

There is no doubt that making on-time payments is a good way to improve your business credit score. However, it’s not the only thing that comes into play.

For instance, you may be making payments to your vendors, suppliers, utilities, and contractors on time, but credit bureaus only know about those payments if they are reported to them. If a vendor doesn’t report payments to Dun & Bradstreet, for example, those on-time payments don’t impact your credit score. 

Another factor that may be causing your credit score to flatline is a lack of data. Credit bureaus need to see multiple active credit accounts reporting — typically over three tradelines. That’s how they generate a meaningful profile of your credit. If you’ve only got one credit card to which you make on-time payments, it’s not enough. 

Keep in mind that your credit utilization may also be too high even if you’re making payments on time. If you’re routinely carrying a high balance, it can pull your credit score down regardless of whether you pay that balance by the deadline.

With so many factors pulling and pushing your credit score, it can be overwhelming to figure out what you need to do. To improve your credit score for business, focus on overcoming these obstacles that can cause your score to stall: 

• Vendor accounts not reporting: Remember, if a vendor account doesn’t report on-time payments, it’s almost as if they didn’t happen (when it comes to your credit score). 
• Thin credit file: If you’ve got too few credit accounts or ones that have only just recently been opened, you’re not giving credit bureaus enough data to score you effectively.   
• Inaccuracies or outdated information: If a vendor has reported inaccurate information or reported the same debt twice, for instance, it could be pulling your score down. 
• Unused credit: If you have open accounts that are sitting idle, you’re not doing yourself any favors. You need activity on your accounts to show credit bureaus that you’re a reliable borrower.

So, what can you do to see an upswing? Financial clarity is power, so here’s how to improve your business credit score (by doing more than just making payments on time!)

Open net-30 accounts that report

Choose your vendors strategically so you can make your on-time payments count toward improving your credit score. Ask the vendor directly if they report to credit bureaus, see if they mention reporting on their website, or use a credit monitoring service. And of course, make those payments to reporting vendors on time, every time. 

Get a business credit card and use it strategically

A business credit card is a great way to separate your personal expenses from your company expenses. However, you’ve got to use it with your credit score in mind. Make small but consistent transactions and ensure you pay your bill every month. 

Check your business credit reports regularly

Nobody’s perfect, which is why errors or inconsistencies can show up in your credit reports. Review them on a regular basis so you can spot whether vendors have reported incorrect information or whether details are out of date. Contact the credit reporting company to have the issue resolved when necessary.

Diversify your credit mix

To show lenders and creditors that you’re able to reliably manage different types of debt, you’ve got to have a variety of credit accounts. These can include accounts for your mortgage, auto loans, and credit cards. However, keep in mind that too many accounts can have a negative impact. Only open accounts that you actually need instead of opening them to improve your credit score.

If you find yourself saying, “How can I improve my business credit score? I’ll do anything!” then it’s time to pause and think about the long-term effects of your actions. Here’s what not to do: 

Don’t close old accounts

If you have old or unused accounts collecting dust, don’t close them. The average age of your accounts matters, so the older accounts can help boost your credit score.  

Don’t open too many accounts too quickly

When you apply for a new account, there is a hard inquiry on your credit report. If you have too many inquiries in too short a time, it can negatively impact your credit score. Plus, new accounts impact your age of accounts negatively as well.

Don’t mix personal and business credit carelessly

Best practice is to keep your personal and business credit separate. High balances from personal spending could hurt your company’s credit score if you use your business accounts, and vice versa.

Improving your score is about visibility, consistency, and strategy — not just good intentions. In addition to making your payments on time, you’ve got to pay special attention to your credit mix, age of accounts, and credit utilization at the very least. 

Mercury helps founders and small business owners demystify business credit scoring by providing transparency and guidance around what truly impacts the score. With the right resources and know-how — and a partner like Mercury for your financial operations — you’re ready to move your credit score in the right direction.

This article is intended as knowledge-sharing, not legal, financial, or tax advice.