I've been fixing business credit for 10+ years, and here's the brutal truth: your business credit score can make or break your leasing deal before you even walk through the door.
Last month, two of my clients applied for similar warehouse spaces. One had a 75 PAYDEX score, the other had a 42. Same revenue, same industry. The first guy got approved with a $8,000 deposit. The second? Rejected outright. No negotiation.
This stuff matters way more than most business owners realize.
What Is a Business Credit Score?
A business credit score is a number that shows how financially trustworthy your company is.
It’s similar to a personal credit score, but instead of measuring your personal borrowing history, it measures your business’s ability to handle debt, pay bills on time, and manage credit responsibly.
Credit bureaus like Dun & Bradstreet, Experian Business, and Equifax Business collect data from lenders, suppliers, and public records to create your score.
Most business credit scores range from 0 to 100. The higher your score, the lower the risk you present to lenders, landlords, and vendors.
A strong business credit score can help you:
- Qualify for better loan terms
- Get approved for business credit cards
- Negotiate better payment terms with suppliers
- Secure favorable lease agreements for office space
Thus, think of it as your company's financial report card that landlords check before they'll even consider your application.
The main scoring systems:
- PAYDEX (Dun & Bradstreet): 0-100 scale, 80+ is solid
- Experian Intelliscore: 1-100, aim for 75+
- Equifax Business Risk Score: 101-992, lower is better
Unlike your personal FICO score, these track how your BUSINESS pays bills - suppliers, vendors, credit cards, loans. They don't care if you personally pay your mortgage on time.
Should You Be Concerned About a Business Credit Score?
Yes, 100% and here’s why.
Your business credit score can directly affect your ability to grow and operate smoothly.
A low score might mean:
- Higher interest rates on financing
- Rejected loan or credit applications
- Larger security deposits for leases or utilities
- Difficulty securing affordable office space near me in competitive areas
Even if you’re not planning to borrow money right now, maintaining a good score builds future flexibility.
It can mean the difference between expanding your business easily or facing financial roadblocks when opportunities arise.
Business Credit Score and Leasing: How it Works
Step 1: The Cut-Off
Most commercial landlords set hard minimums. I've seen:
- Premium locations: 75+ required
- Secondary markets: 60+ minimum
- Sketchy areas: They might take 40+, but you'll pay for it
Pro tip: Ask the leasing agent what their minimum is upfront. Saves everyone time.
Step 2: Deposit Math
Here's the formula most landlords use:
- 80+ score: 1-2 months deposit
- 60-79 score: 2-4 months deposit
- 40-59 score: 4-6 months deposit
- Under 40: Good luck (or massive deposit + guarantees)
Step 3: Personal Guarantee Trigger
Score below 70? You're probably signing a personal guarantee. That means YOUR house, car, and savings are on the hook if the business can't pay rent.
I hate seeing business owners sign these, but sometimes it's the only way to get space.
Two Real Examples from My Client Files
Client #1: Sarah's Marketing Agency
- Started with 38 PAYDEX (payment disasters from previous partnership)
- Needed affordable office space in downtown area
- First landlord wanted $24,000 deposit for $4,000/month space
- After 7 months of credit repair: 81 PAYDEX
- Same type of space: $4,000 deposit, no personal guarantee
Client #2: Mike's Auto Shop
- Had 67 Experian score (decent but not great)
- Found perfect 5,000 sq ft warehouse
- Landlord approved BUT required:
- 4 months deposit ($20,000)
- Both partners to personally guarantee
- 2-year lease only (wanted 5 years)
- We boosted him to 84 in 5 months
- Renegotiated: 2 months deposit, 5-year lease, no guarantees
Bottom line: Sarah saved $20,000 upfront. Mike saved $12,000 and got the lease terms he actually wanted.
What Happens if You Have a Bad Business Credit
You Get the Worst Locations
High-credit tenants get first dibs on prime spots. You're stuck with whatever's left - usually spaces with problems the landlord can't fill otherwise.
Rent Bumps
Some landlords charge "credit risk premiums" - basically higher rent because they think you might not pay. I've seen 10-25% markups.
Lease Length Restrictions
Bad credit = short leases.
Landlords don't want to lock in long terms with risky tenants. You get stuck with 1-2 year deals when you need 5+ years for stability.
Equipment Financing Gets Harder
Many business owners don't realize this: if you can't get good commercial space, you also can't get good equipment financing. It's a double hit on your growth plans.
Can I Improve a Business Credit Score? How?
Another yes here. A business credit score can be improved, but it takes a strategic and consistent approach.
Much like personal credit, your score is influenced by your financial behavior over time, so focusing on the right actions can make a measurable difference.
Here are proven steps to strengthen your business credit score:
Check Your Business Credit Reports Regularly
- Request reports from Dun & Bradstreet, Experian Business, and Equifax Business.
- Review them for errors, outdated information, or accounts that don’t belong to you.
- Dispute inaccuracies promptly. Even small corrections can impact your score.
Pay Bills on Time (or Early)
- Timely payments are one of the biggest factors in your score.
- Set up reminders or automate payments to vendors, lenders, and utility providers.
Keep Credit Utilization Low
- Avoid maxing out your business credit cards or lines of credit.
- Aim to use less than 30% of your available credit whenever possible.
Establish More Credit References
- Work with vendors that report payment history to credit bureaus.
- Having multiple positive trade lines can build your score faster.
Separate Personal and Business Finances
- Use a dedicated business bank account and credit card.
- This not only strengthens your business credit file but also protects your personal credit.
Build Relationships with Lenders and Suppliers
- Consistent, positive relationships can lead to better terms and more flexible credit options, which in turn can improve your score.
- Improving a business credit score isn’t an overnight process.
With steady effort and disciplined financial habits, many businesses see significant improvement within six to twelve months. Giving them greater leverage when applying for financing, negotiating contracts, or securing favorable lease terms.
When to Start Working on This
Planning to lease in 6+ months? Start now. You have time to fix real problems.
Need space in 3-6 months? Focus on quick wins - pay down balances, dispute errors, establish one new trade line.
Need space NOW? Be honest about your situation. Some landlords work with businesses that have plans to improve credit. Bring documentation of your credit repair efforts.
The Real Cost of Waiting
Every month you delay costs money:
- Higher deposits tie up cash you need for operations
- Personal guarantees put your personal assets at risk
- Short lease terms mean you'll be moving again soon (expensive!)
- Limited location options hurt your business growth
I've seen too many businesses pay $50,000+ extra in the first year just because they didn't address credit issues before they started looking for space.
My Bottom Line
Your business credit score isn't just some number - it's the key to getting the space you actually want at terms that don't kill your cash flow.
Most business owners ignore this until they're scrambling to find space, then wonder why every landlord wants their firstborn as collateral.
Don't be that person. Fix your credit before you need it, not after.