How to Clean Up Your Business Credit Report: Fixing Errors and Avoiding Mistakes

Hey Detroit business owners,

Your business credit report is more than just a snapshot of your financial health — it’s a tool that can open doors to funding, growth opportunities, and partnerships. But if your credit report is full of errors or mistakes, it could be holding you back.

The good news? You can fix it. Whether it’s incorrect information, outdated entries, or simple mistakes, cleaning up your business credit report is something you can tackle with the right strategy. In this guide, I’ll walk you through how to clean up your credit report, fix errors, and avoid common mistakes so you can boost your business credit score and set your business up for long-term success.

Let’s dive in and get your credit report in tip-top shape!

Step 1: Get a Copy of Your Business Credit Report

Before you can fix anything, you need to see exactly what’s on your business credit report. There are three major business credit bureaus you need to check:

• Experian Business
• Equifax Business
• Dun & Bradstreet

What You Need to Do:

• Request your credit report from each of these bureaus. You can do this for free once a year or for a small fee if you want to check it more frequently.
• Review each report carefully to see any discrepancies, negative marks, or inaccurate entries.

Remember, credit reports aren’t always perfect, so reviewing them is the first step to cleaning them up.

Step 2: Identify and Dispute Any Errors

Once you have your credit reports, it’s time to look for errors. Mistakes happen—whether it’s outdated information, incorrect balances, or entries that should’ve been removed. If you find any errors, you need to dispute them immediately to prevent them from hurting your credit score.

What You Need to Do:

1. Look for Common Errors: These could include:

• Inaccurate payment history: If you’ve made payments on time but they’re marked as late or missed, that’s a major error.
• Incorrect balances: Sometimes, your credit report may reflect higher balances than you actually owe.
• Outdated information: If an old debt has been paid off or settled but still shows up as active, it’s time to dispute it.

2. Dispute Errors Directly: Each credit bureau offers a process for disputing errors online. You’ll need to:

• Provide documentation: This could be proof of payments made or
  communication with creditors showing that the debt is paid off.
  *** File the dispute: Follow the online steps for each bureau. Typically, they’ll investigate your dispute within 30 days. ***

3. Track Your Disputes: Keep a record of any disputes you file and follow up if you don’t hear back within the expected timeline. Disputing errors is key to ensuring your business credit is accurate and up to date.

Step 3: Address Negative Items on Your Report

Sometimes, the issue isn’t an error but a legitimate negative item on your business credit report. If you have late payments, defaults, or high debt, you need to address them head-on.

What You Need to Do:

1. Pay off Outstanding Debts: Start by paying down any outstanding balances. Focus on high-interest debts first to make the most impact on your debt-to-income ratio. The sooner you pay off existing debts, the sooner your credit score will improve.
2. Negotiate with Creditors: If you have negative marks from unpaid or late accounts, don’t hesitate to negotiate with your creditors. Ask if they’re willing to remove or update the negative entry in exchange for repayment. Many creditors are open to this if you show a commitment to paying what you owe.
3. Settle Debts: If your debts are significant, you may want to consider a debt settlement strategy. Settling debts for a lower amount than owed can help you avoid bankruptcy and improve your business credit.
4. Keep Payments on Time: Once you’ve dealt with existing negative items, make sure to stay on top of future payments. Timely payments will show lenders that you’re a reliable borrower and help rebuild your credit score over time.

Step 4: Keep Your Business Credit Utilization Low

Your credit utilization rate (how much of your available credit you’re using) plays a huge role in your credit score. If your utilization rate is too high (over 30%), it can hurt your credit. To fix this, you need to lower your credit utilization and demonstrate better debt management.

What You Need to Do:

1. Pay Down Balances: The easiest way to lower your credit utilization is by paying down the balance on your business credit cards or lines of credit.
2. Request Credit Limit Increases: Another way to lower your credit utilization rate is to request a higher credit limit from your lenders. This doesn’t mean you should use more credit, just that it will reduce the percentage of available credit you’re using.
3. Keep Balances Low: Try to use less than 30% of your available credit to maintain a healthy utilization ratio.

Lowering your credit utilization will send a positive signal to potential lenders, showing them you’re not over-leveraged and can manage your business credit responsibly.

Step 5: Build PosiƟve Credit History Moving Forward

Now that you’ve cleaned up any errors and addressed negative marks, it’s time to focus on building positive credit history. A strong credit history is key to improving your business credit score and accessing better financial opportunities.

What You Need to Do:

1. Open New Credit Accounts Carefully: Consider applying for a secured business credit card or small line of credit if you don’t have access to much credit. Use these accounts responsibly and pay off balances each month to build positive credit history.
2. Make Timely Payments: Your payment history makes up a significant portion of your business credit score. Always make payments on time to show lenders you can be trusted with credit.
3. Use Credit Responsibly: Don’t overextend yourself. Use business credit for strategic purchases that will help your business grow, such as marketing or inventory, and pay the balance off as soon as possible.
4. Monitor Your Credit: Set up alerts or regularly check your business credit report to ensure everything is in order and you’re not overlooking any mistakes.

Step 6: Consider Professional Help If Needed

If your business credit report feels overwhelming, or if you’re not seeing progress on your own, it may be time to consult a credit repair professional. They can help you identify mistakes, negotiate with creditors, and develop a long-term strategy for rebuilding your credit.

What You Need to Do:

1. Hire a Professional: Look for a certified credit counselor or business consultant who specializes in business credit repair. They can guide you through the process and help you avoid costly mistakes.
2. Consider Debt Consolidation: If you’re dealing with significant debt, a debt consolidation loan might help streamline your payments and improve your credit report.

Final Thoughts: Cleaning Up Your Business Credit Report Is Worth the Effort

Cleaning up your business credit report is a critical step in positioning your business for future success. Whether it’s disputing errors, addressing negative items, or building positive credit history, every effort you put in will pay off in the long run.

In Detroit’s competitive business market, a healthy business credit score is your ticket to funding, partnerships, and growth opportunities. So, take control of your credit report, stay proactive, and get your business credit back on track.

If you need any help along the way, Archusphere Inc. is here to guide you. Let’s work together to clean up your business credit report and build a stronger financial future for your business.