In this article
How do I improve my business credit score in Canada?
Pay suppliers, utilities and lenders on or before the due date, because payment history is the most important factor. Build a file with a business credit card paid in full each month and a supplier account on net terms, and review your business credit report at least once a year for errors.
Most owners know their personal credit score. Far fewer know they also have a business credit profile, or that lenders and suppliers are quietly using it. This guide explains how business credit works in Canada and what you can do to improve it.
How Canadian business credit works
In Canada, your business credit profile is maintained primarily through Equifax Business and Dun & Bradstreet. Unlike consumer credit, business credit is less standardized: different lenders pull different sources and weight them differently. There is no single number everyone agrees on, which is why it is worth understanding what feeds the file.
What goes into it
- Payment history with suppliers, utilities and lenders
- How much credit you use compared with your limits
- How long the business has had credit accounts
- Public records such as judgments or liens
- The size and type of the business
Payment history above all else
Payment history is the most important factor. Consistently paying suppliers, utilities and lenders on or before the due date builds a strong foundation. Late payments, even by a few days, can register negatively on your commercial credit report. If cash is tight, call the supplier before the due date rather than after.
Building a file from scratch
Many small businesses have thin or non-existent commercial credit files. If that is you, start by opening a business credit card in your company name and paying it in full monthly. Establish a vendor or supplier line with net terms and pay on time. These small steps compound over time. For a longer walkthrough, see how to build business credit in Canada.
Your personal credit still matters
Your personal credit score still matters, especially for businesses under three years old. Lenders often look at both the business and personal profile when making decisions. Keep your personal credit utilization under 30% and resolve any derogatory marks where possible.
Monitor and dispute errors
Pull your business credit report at least annually. Errors are not uncommon, especially for businesses with similar names or addresses. Dispute anything that appears inaccurate directly with the credit bureau, and keep a copy of what you sent.
What good credit gets you
A stronger profile can mean better terms from suppliers, a larger credit line and a wider choice of lenders. If you are weighing a loan, read what credit score you need for a business loan to see how lenders use the numbers.
