A bad credit rating can damage your business in several ways. First, bank loans are out of the question if you run afoul of your financial responsibilities. That means you have to pay cash for everything, which ties up your working capital and impacts your cash flow.

And don't expect any of your suppliers to extend you credit. You'll lose access to the 30-day, 60-day and even 90-day "loans" that trade-credit customers enjoy. What's more, many suppliers offer customers significant discounts to encourage payment before the official due date on their bills. If you're a cash customer because of credit problems, you're unlikely to get this discount.

So what can you do if you don't have stellar credit? First, don't panic. Bad business credit can be repaired. How? First, start talking with your creditors before your problems get out of hand.

The goal is to arrange a payment schedule that is reasonable and fair to both sides. If you have paid your bills promptly in the past, creditors may be willing to work with you to set up an alternative payment schedule. If you can successfully complete a repayment plan, many creditors will continue doing business with your company.

Sometimes, credit problems aren't due solely to a cash crunch. Mistakes, misunderstandings and structural issues within your company can tangle your credit accounts. Are your bills being sent to the right address and to the right person? Are your checks being received by the right department and the right person? Is it clear when payments are supposed to be made?

Late payments are often linked to improper handling of paperwork, incorrect addresses, computer malfunctions, or improperly trained employees. By establishing workable guidelines for handling bills, invoices and payments, you can quickly correct these problems.

You can also proactively improve your business's creditworthiness by following these important steps:

• Always pay on time. Nothing impacts your credit score more than your ability to pay back loans in a timely manner. You should do everything in your power to pay within the terms set forth by your suppliers. This is the most direct way to improve your credit rating.

• Make sure the companies that extend you credit also report your payment history to the credit bureaus. Are timely payments to suppliers and lenders not being reflected in your profile? If so, you are missing out on a key opportunity to get the credit you deserve for paying your bills on time. You should check your profile twice a year to make sure that all the vendor payment relationships are captured.

• Keep your personal finances in good order. How well you manage your personal finances can impact your company's creditworthiness. Keep in mind, though, that your business and personal ratings are separate and distinct. One is not used to directly impact the other.

• Study your business credit profile. Make sure the information in your business credit profile is complete and consistent. If you see accounts that aren't yours, mistakes your bank made or false negative activity, you should address these inaccuracies. Some business credit companies like Dun & Bradstreet and Experian offer online tools and customer service to help you update and manage these kinds of details in a timely manner.

• Keep your debt down. The capital structure of your business -- that is, the extent to which you use equity or debt to finance your operations—is an important determinant of your creditworthiness. If other companies see a lot of debt on your balance sheet, they are less likely to extend credit as you pose a greater risk of default.

• Contribute to your own credit profile. Communicating as much information about your business as you can to credit bureaus like D&B ensures a more robust report. Likewise, doing business with companies that you know frequently report their experiences to credit bureaus also builds your profile.

With tightened credit requirements, companies across the board are feeling the squeeze. However, careful planning and execution can help you fix and improve your business credit.

Over time, you'll have all the credit you require.