What is business credit repair? What you need to know

When people turn to credit repair companies for help with their credit, it’s usually because they need something — a mortgage, a car loan, or a credit card, for example — but their credit scores are holding them back. 

Business owners may experience a similar frustration: They need credit, but their business credit scores or personal credit scores aren’t strong. 

Credit repair is always somewhat risky: There’s no guarantee anyone can fix your credit problems, and it can often be expensive.

But that’s even more true of business credit since the consumer protection laws that apply to personal credit don’t apply to business credit. 

Learn about business credit repair and find out if it’s a fit for your business goals.

What is business credit repair?

Business credit repair is the process of reviewing your company’s credit report data from agencies like Dun & Bradstreet (D&B), Equifax (Business), and Experian (Business), and trying to improve them, either by trying to remove negative information, or by adding positive credit references that may help boost business credit scores. 

It matters because lenders, suppliers, and other partners may review credit reports or credit scores when trying to decide whether to lend money to your company, hire your business as a contractor or supplier, or extend business insurance. 

In other words, good credit may help your business expand or grow, while bad credit may hold it back. 

Why businesses seek credit repair services

Business owners may turn to credit repair services because they think professionals have insider methods, their own efforts haven’t worked, or they just feel like the process is too overwhelming and they want to focus on other activities in their business. 

Here are some common concerns that lead business owners to turn to credit repair companies for help:

Missed opportunities

Poor business credit scores can make it harder to get certain types of small business loans or funding, secure favorable payment terms, or attract investors. 

Challenges of correcting mistakes

Correcting errors on your business credit reports can be frustrating. 

With consumer credit reports, you have the right under the federal Fair Credit Reporting Act (FCRA) to see your credit reports for free at least once a year, and then to dispute information you believe is inaccurate or incomplete on your consumer credit reports. The credit bureaus must investigate and either correct the mistake or tell you within a reasonable period of time (usually within 30 days) why they did not change it. 

Business credit reports are not covered by the FCRA. To see your credit report details, you’ll need to purchase access. Once you get them, disputing errors can be confusing because each bureau has its own process for handling disputes.

Lack of business credit knowledge

The basics of building business and personal credit are similar: get accounts that report then pay on time. But the specific steps for establishing good business credit aren’t always obvious. 

There are some significant differences between business and personal credit reports and scores. Among them:

Source: Nav.com

For more differences, read What’s the difference between business credit vs. personal credit?

Time commitment of credit repair

Credit repair takes time and effort. A dispute may take 30 to 45 days or longer to resolve. If several items need correction, it may take a few months before you see improvements. (With business credit there is no time limit by which bureaus must investigate, correct, or delete information.) 

Because of the time involved, some business owners prefer to hire someone to help them. 

That may be helpful in some cases, but if you aren’t careful, you could wind up spending a lot of money and not get the results you’d hoped for. 

How to identify credit repair scams

The Federal Trade Commission (FTC) warns consumers to watch for companies that demand payment before doing any work, tell you not to contact credit reporting agencies, or fail to explain that you can fix errors on your own for free.

Their warnings are aimed at consumers, but business owners can also benefit from being cautious when choosing a company to help them with their business credit. 

Legitimate credit repair companies are transparent about their process and know that there is no guarantee of results.

Business credit repair vs. business credit building scams

For many businesses, their business credit scores are low due to lack of business credit history, not specifically due to negative information in their business credit files. 

That means that in many cases, improving business credit is less about repairing errors and more about establishing a positive payment history.

Be cautious of a company that claims they can drastically improve your score in record time, or that building business credit will guarantee significant business funding. 

Improving business credit often takes steady effort over time, not shortcuts. And just because you have a great business credit score, that doesn’t mean lenders will be eager to lend money to your business, as some companies try to make you believe. Credit is often just one of the factors lenders may consider when deciding whether to fund your business.

What to know before you sign with a credit repair service

If you are trying to repair your personal credit, make sure the company follows the regulations in the Credit Repair Organizations Act (CROA). 

The law requires that companies provide a written contract outlining costs, services, and expected completion dates. You should also look for clear communication, a cancellation policy, and verifiable client reviews. Avoid companies that charge upfront or make vague promises. 

Checking with your state attorney general’s office or the Better Business Bureau may also be helpful. Most states regulate consumer credit repair companies.

Get helpful tips about protecting yourself from credit repair scams from the CFPB.

Unlike consumer credit repair, business credit repair is not federally regulated. Proceed with caution.

Make sure you have the opportunity to review a written contract and pay careful attention to: 

• Cost
• Refund policies
• Services and/or results promised

A couple of other questions to consider: 

• Am I feeling pressured to buy now? 
• Will I learn about my business financial health in the process?

That last question is an important one because if you turn your business credit completely over to someone else you may not learn essential credit and financial strategies that can help you grow your business going forward. 

Watch the webinar: Build and leverage business credit to grow your business

How to dispute credit report errors yourself

You can dispute inaccurate information on both business and personal credit reports yourself. 

Start by requesting your free personal credit reports from Equifax, Experian, and TransUnion at AnnualCreditReport.com. 

Get your business credit report data so you can review it. You can go directly to the major business credit bureaus — Experian, Equifax, and Dun & Bradstreet — or through a service like Nav Prime. 

With Nav Prime you’ll get detailed reports based on credit data from each of the major business credit bureaus, plus two consumer credit bureaus.¹ 

Review each report carefully for outdated accounts, incorrect payment history, or duplicate records. Dispute incorrect information. When you do, clearly identify the error, explain why it’s wrong, and attach documentation if you have it. 

Learn how to write credit repair letters here. 

Understanding your rights: FCRA and CROA in detail

The Fair Credit Reporting Act (FCRA) is a federal law that covers consumer credit reports, not business credit reports. Under that law, you have the right to: 

• Know what is in your consumer credit file with any national consumer reporting agency,
• Dispute information you believe is incomplete or inaccurate,
• Be notified of the results of an investigation into a dispute,
• Have disputed information corrected if it’s found to be inaccurate, or deleted if it can’t be verified

This law also limits who can see your credit reports, and how long negative information can be reported. And you have the right to take legal action if credit bureaus don’t follow the law. 

The Credit Repair Organizations Act (CROA) is a federal law that regulates consumer credit repair organizations. Again, this law doesn’t apply specifically to business credit repair.

Here are the main protections it offers:

You don’t have to pay upfront

Credit repair companies can’t charge you before they’ve done the work. They must actually perform the services they promise before asking for payment.

You must get a written contract

Before any work starts, you must receive and sign a written contract. It should clearly explain what the company will do, how much it will cost, and how long it should take. Don’t agree to anything until you have this in writing.

You have three days to change your mind

After you sign, you have three business days to cancel the contract — no questions asked and no fees or penalties.

No false promises or misleading claims

Credit repair companies can’t guarantee they’ll remove accurate negative information from your credit reports, and they can’t tell you to misrepresent anything to a credit bureau or lender.

You must get a copy of your rights

Before you sign a contract, the company must give you a separate document called “Consumer Credit File Rights Under State and Federal Law.” This explains your legal rights when it comes to credit repair.

The Federal Trade Commission (FTC) and the Consumer Financial Protection Bureau (CFPB) oversee credit bureaus and credit repair companies.

If a company violates either of these laws, you have the right to sue.

Frequently asked questions