As an entrepreneur launching a startup for the first time, you probably wonder if business credit scores exist. The straightforward answer is yes! But unlike personal credit scores, they work a little differently and also get influenced by various factors run by different credit bureaus.

Here’s the catch: According to the Federal Reserve Banks’ Small Business Credit Survey, nearly 60% of small businesses had fair or poor financial conditions, which might mean they have poor credit scores.

Further, another survey reveals that most entrepreneurs apply for business loans for the following reasons:

Business expansion (42.4%)
Equipment purchases (29.4%)
Marketing and advertising (28.6%)
Business franchising (27.6%)
Commercial real estate purchases or remodeling (26.8%)
But the question is: do they have good credit standing to get loan approval?

This page helps you understand the importance of business credit scores. But first, read on to learn:

What they are and how they work;
What key factors impact these scores;
How to improve your credit score.