You have motivation, moxie, and one great idea. That’s the good news. The bad news? Only half of new businesses get a chance to celebrate their sixth birthday, according to the U.S. Bureau of Labor Statistics. And that’s why we’re here today.

A business can flop in many ways — including crummy management, poor market fit, and uncompetitive pricing, to name a few — and the result is always the same: not enough cash to stay afloat. That’s why access to business credit is crucial to success while you work through your brilliant business plan.

Here are five pointers that will help you open up those credit floodgates:  

The top reason banks won’t give your business money

Drum roll, please — the biggest reason small businesses are denied credit goes to a low credit score. If establishing and building your business credit score isn’t high on your priority list when starting your enterprise, that will change the first time you’re rejected for a credit card. Or when you’re faced with higher borrowing costs than you can afford. Or when you just can’t get that small business loan to make the improvements you need.

Credit scores don’t just help your finances

Beyond access to financing, business credit scores boost the ability of fledgling firms to attract new customers.

Here’s why: Unlike with personal credit reports, anyone — including potential customers and suppliers — can look at your business credit report. These prospective partners will then evaluate whether or not they should work with you.

“It’s not just about finances. It’s about your credibility.” — Amber Colley, director of sales and partnerships at Dun & Bradstreet, a business credit bureau.

Sure, you can get a small business loan even if your personal credit is tarnished. But if you take steps first to build your business credit, you’ll qualify for lower interest rates.

Get to know the ‘big three’

Three big business credit bureaus provide credit scores: Dun & Bradstreet, Experian, and Equifax. Each one has a different formula for calculating scores. Since you never know which one your vendors, creditors, or potential customers will check, it’s smart to maintain profiles at all three.

Dun & Bradstreet, for example, allows business owners to update basic information, such as years in operation or number of employees, and upload financial statements. The more complete your profile is, the better, Colley says.

For a rundown on how each credit bureau rates your score, check out this business credit score guide.

Make sure they get to know you too

If you buy supplies, ingredients, or other materials from third-party vendors, those purchases could also help raise your credit score.

Many suppliers extend something called trade credit, which means they allow you to pay several days or weeks after you receive merchandise. If you have this kind of relationship, ask your supplier to report your payments to a business credit bureau. As long as you stick to the terms of the agreement, your credit score will get a nice little boost.

The same is true for small business loans. Banks typically report directly to credit bureaus, but if you have bad credit, you probably won’t qualify for a bank loan. Many online lenders — which are more willing to lend to bad-credit borrowers — also report to the credit bureaus, including OnDeck, Lending Club, Funding Circle, Fundation, Kabbage and BlueVine.

The most important tip for building your business ‘cred’

All your work to get on the radar of business credit bureaus will be counterproductive if you don’t make your payments when they’re due. Each bureau uses slightly different methods to determine your credit score, but all consider your history of paying creditors.

To secure a good score, make your payments on time or, even better, early. Dun & Bradstreet assigns perfect scores only to those who pay well before the deadline.

A long credit history tends to weigh favorably as well, so the sooner you can start establishing business credit, the better. But don’t max out your credit accounts — limit your spending to 20 percent to 30 percent of your credit limit to keep your scores sky-high.

Kevin Voigt Kevin Voigt is a staff writer at NerdWallet, a personal finance website.
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