7 Business Credit Mistakes That Could Cost You Thousands
- D. Shorter
- Mar 20
- 4 min read
Building and maintaining strong business credit is essential for any entrepreneur looking to secure funding, negotiate better terms with suppliers, and protect personal finances.
Unfortunately, many small business owners unknowingly make costly mistakes that damage their business credit profile—and these mistakes can end up costing thousands of dollars in missed opportunities, high interest rates, and denied loans.
At Black Women in Wallstreet, we’re here to help you avoid financial pitfalls and set your business up for success. In this article, we’ll break down 7 common business credit mistakes and how to avoid them.
1. Using Your Personal Credit for Business Expenses
🚨 Why It’s a Mistake:Many entrepreneurs start their business by using personal credit cards or loans to cover expenses. While this might seem convenient, it blurs the line between personal and business finances, making it harder to build your business credit profile.
💡 How to Fix It:
Apply for a business credit card or business line of credit to keep finances separate.
Register for a DUNS number from Dun & Bradstreet (it’s free!) to start building business credit.
Always use your business credit accounts for company expenses to establish a strong history.
2. Not Establishing Credit with Business Vendors
🚨 Why It’s a Mistake:Your business needs credit relationships with vendors and suppliers to build a strong credit profile. If you only pay in cash or don’t set up net-30 vendor accounts, you’re missing out on credit-building opportunities.
💡 How to Fix It:
Work with vendors that report payments to business credit bureaus like Experian, Equifax, and Dun & Bradstreet.
Consider suppliers like Uline, Quill, or Grainger, which offer net-30 accounts to help build credit.
Always pay vendor invoices on time or early to establish positive payment history.
3. Making Late Payments on Business Credit Accounts
🚨 Why It’s a Mistake:Late payments hurt your business credit score and can lead to higher interest rates, penalties, and lower credit limits. Business lenders and creditors view timely payments as a sign of financial responsibility.
💡 How to Fix It:
Set up automatic payments or calendar reminders for all due dates.
Negotiate payment terms if cash flow is tight—many vendors will offer extended deadlines if you communicate early.
Pay invoices at least 5-10 days early to ensure they’re reported on time.
4. Applying for Too Much Credit at Once
🚨 Why It’s a Mistake:Every time you apply for a business loan or credit card, lenders pull your business credit report, which can result in a hard inquiry. Too many hard inquiries in a short period lower your business credit score and make lenders see you as risky.
💡 How to Fix It:
Only apply for credit when necessary. Too many applications can make you look desperate for funding.
Space out applications by at least 6 months to avoid multiple hard inquiries at once.
If possible, pre-qualify for business credit cards or loans to check eligibility without a hard pull.
5. Ignoring Your Business Credit Score
🚨 Why It’s a Mistake:Many entrepreneurs don’t even realize they have a business credit score until they’re denied a loan. Unlike personal credit, business credit is public information, meaning lenders, suppliers, and even competitors can view it.
💡 How to Fix It:
Regularly check your business credit reports from:
Dun & Bradstreet (D&B Paydex Score)
Experian Business Credit Score
Equifax Business Credit Report
Set up alerts to monitor changes in your score.
Dispute errors or incorrect information on your report immediately.
6. Maxing Out Your Business Credit Cards
🚨 Why It’s a Mistake:Just like with personal credit, maxing out your business credit card increases your credit utilization ratio, which negatively affects your business credit score. High utilization makes lenders see you as a financial risk, leading to higher interest rates or credit denials.
💡 How to Fix It:
Keep your credit utilization below 30%—meaning if you have a $10,000 limit, don’t spend more than $3,000 at a time.
If you need to make large purchases, pay off the balance quickly to avoid a high utilization report.
Request credit limit increases periodically to keep your utilization low.
7. Closing Old Business Credit Accounts
🚨 Why It’s a Mistake:One of the biggest factors in your business credit score is credit history length. If you close an old account, you lose that history, which can lower your score.
💡 How to Fix It:
Keep older business credit cards open, even if you don’t use them often.
If you must close an account, keep at least one long-standing account active to maintain a strong credit age.
Consider using old accounts for small recurring expenses (like software subscriptions) to keep them active.
Protect Your Business Credit & Your Money
Your business credit profile is a powerful tool that can open doors to funding, better interest rates, and growth opportunities. But if you make these mistakes, you could end up losing thousands of dollars in high fees, denied loans, and missed business opportunities.
By staying informed and making smart credit decisions, you’ll position your business for long-term success and financial stability.
✅ Here’s What to Do Next:
💡 Check your business credit score today with Dun & Bradstreet, Experian, or Equifax.💡 Set up business credit accounts with vendors and lenders that report payments.💡 Avoid common mistakes and make smart credit moves to grow your business!
💬 Drop a comment below: Have you made any of these business credit mistakes?
What’s your biggest challenge with business credit? Let’s talk!
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