Few things are as important to a healthy business as its credit score. Your credit score affects everything: interest rates for loans, your ability to qualify for financing, your relationship with suppliers and the type of equipment you can get for your company.

It’s important to understand how your credit rating works and what you can do to protect it — before problems appear. Here are several factors that go into determining your business credit score and common mistakes that can hurt it.

Credit Applications

Every time you apply for some type of credit, it shows up on your credit history. There’s nothing wrong with applying for business credit; in fact, you need to have at least one type of credit to start building a positive credit score.

The trouble comes when you apply for too many lines of credit at too many different places. Shopping around is fine in terms of asking questions and seeing what the requirements and fees are, but you shouldn’t fill out an application unless you’re certain you want to take the next step.

Having too many credit applications show up in a short period of time makes lenders think you’re desperate and that something must be going wrong with your business’s finances. This can flag your account and hurt your credit rating a lot.

Time in Business

The longer you’ve been operating successfully, the better your credit rating — if you’ve been paying your bills on time. A great business credit score is like fine wine: It only gets better with time. Do your best to pay suppliers and lenders on time above all else.

Once you’ve hit the magical number of two years in business, many doors are opened to you for financing. You can get better terms for equipment loans, real estate financing and SBA loans.

Collections and Tax Liens

If bills go unpaid so long that suppliers are forced to turn your account over to a collection agency, the effects on your business credit score are devastating. Don’t let this happen! It’s preferable to settle things with your supplier directly.

Don’t be afraid to reach out to suppliers and explain the situation. If you’ve been a longtime customer that normally pays on time, many businesses are willing to adapt to emergencies.

You may be able to explain what went wrong and why you can’t pay the full amount immediately. It’s often possible to reach an arrangement to pay back the bill in smaller amounts over time and keep the debt off your credit rating.