You are likely already aware that you have a personal credit score lenders use to determine whether or not to loan you money. However, if have a business credit card, your company probably also has a credit rating that impacts your eligibility for business loans. If you keep getting turned down for loans, your business credit score may be the reason why. Here are two things you can do to improve your rating.  

Eliminate Inaccuracies

Business credit scores are similar to personal scores in a lot of ways: your company information and accounts are reported to a credit bureau and that bureau rates your company based on that info. However, there are differences. Credit bureaus typically rate your business in comparison with other companies similar to yours to generate a score and establish creditworthiness. There may also be an evaluation of your company's stability (how likely you are to close). 

Like personal credit reports, business reports can be fraught with errors. Some companies may report your payment history and others may not. The credit bureau may mix up your company information with another business that has the same or similar name. The FTC reported that 5 percent of consumers had mistakes on their credit reports. It's safe to assume the same thing applies to businesses.  

Additionally, your business can fall victim to identity theft just like a person. The thief may use your company's employer tax ID number to apply for credit or set up accounts by pretending to work for your company. Credit reporting agencies are required by law to provide you with one free report per year. Take advantage of this to get your report from each of the bureaus and make sure they are accurate. The simple act of getting rid of mistakes and fraudulent accounts can raise your score significantly.

Manage Your Credit Utilization

Another thing that affects your credit worthiness is your credit utilization rate. Banks may be wary of extending you a loan if your entire business operation is already financed by debt or your existing credit lines are maxed out. A high credit utilization rate make lenders feel there is a higher risk you may default because you can't keep up with the payments or that you may already be struggling with financial issue (e.g. using credit to float a financially troubled business).

The best thing you can do in this situation is to pay down your existing debt so that your credit utilization rate is low. It is recommended to keep this rate at about 25 percent (e.g. only use 25 percent of your credit lines), to help build up your credit score.

For more information about improving your company's credit score, contact a knowledgeable business lender.