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Understand Your Company’s Credit Score

You may also encounter errors and inaccuracies that can prevent you from obtaining loans or credit accounts from suppliers. Therefore, it is good for business owners to work hard to improve the credit score of the company. Make sure you pay all of your bills and bills on time, pay off your loans, and check your business credit report regularly to correct any errors you discover.

As with your personal credit scores, it’s important to check your business credit scores regularly, as credit bureaus can make mistakes or have incorrect information about their reports. Three of the most important are Dun & Bradstreet, Equifax Business and Experian Business. For example, Dun & Bradstreet uses what it calls a D-U-N-S numberĀ® to track any physical location of businesses: you’ll need to request one to appear in your system.

Maintaining good business credit reduces the cost of borrowing money and leverages your business for more favorable repayment terms with both creditors and suppliers. To view your company’s credit scores, you’ll need to contact business credit reference agencies. For the D&B Paydex score, you need a D-U-N-S number in addition to your employer identification number. Established companies with a low business credit score can sometimes rely on the business owner’s personal credit score for loans and lines of credit.

The big three business credit bureaus analyze a company’s payment history and other financial data, and also look at public records. If there are tax or legal issues, such as liens on a property, that affects a business owner’s credit and business credit risk score. FICO SBSS criminal records uses business credit reports and a personal credit report from the owner or owners, and additional financial information, to determine creditworthiness. The FICO SBSS is required by the Small Business Administration, as well as banks, credit unions and other lenders.

Even if you could start your business with your own savings, the time will come when you will need to access additional funds. It will be incredibly helpful for you to understand the big picture when it comes to business credit. All business credit reference agencies report overdue payments and negative data that affects a company’s credit score. Therefore, accuracy is very important for business credit profiles, as the slightest business registration error can be detrimental to your business credit score.

It’s a good idea to check your company’s credit reports regularly to keep an eye on the information lenders and service providers see when they purchase your report. A company can improve its corporate credit score by going into debt, even if it doesn’t need money right now. In particular, credit rating agencies look at how many business credit cards you use and what other types of loans may be outstanding, along with how quickly you return them.

Most business credit scores are ranked on a scale from 0 to 100, while business scores using the FICO Small Business Scoring Service range from 0 to 300. A business credit score provides credit bureaus, loan issuers, and sellers or sellers with a general idea of how trustworthy you are when it comes to borrowing money. Just like your personal credit score, a higher business credit score tells stakeholders that you are more creditworthy.

A strong business credit history with timely payments to suppliers and suppliers can help increase your SBSS score. The FICO SBSS score is used for term loans, credit lines, and business loans up to $350,000 from the Small Business Administration. However, just as there are many different versions of consumer credit scores, there are other business credit scores in addition to these.

Creating a business credit score helps your business build the credibility that matters to banks, lenders, suppliers, and partners. Experian business credit reports help owners and financial officers better understand the health of the companies they do business with. In addition to the factors we’ve mentioned above, other credit report information may include details about your business, such as the number of employees, subsidiaries, sales, and more. It lists every credit-related transaction so you can use the report to find inaccuracies to protect your credit. The most important thing to consider when calculating a business credit score is whether your company pays its bills on time. All credit bureaus look at that, and sometimes that’s the most important thing that’s part of determining your business credit score.