How To Check Business Credit
If you run a business, it is essential to keep track of your credit score. Your business credit score affects your ability to secure loans, get favorable credit terms, and expand your business. In this article, we will discuss how to check your business credit score and what you need to know about it.
What is a business credit score?
Understanding business credit score
A business credit score is a numerical rating that is assigned to a business to determine its creditworthiness. This score is based on various factors such as payment history, credit utilization, and credit history. It is used by lenders, suppliers, and other creditors to assess the risk of doing business with your company.
How is it different from personal credit score?
Personal credit score and business credit score are different. While personal credit scores are based on your personal credit history, business credit scores are based on your business's credit history. It is important to keep these two scores separate to avoid any confusion and to protect your personal finances.
Why is it important?
A good business credit score can help you get better loan terms, lower interest rates, and access to more credit options. It can also help you establish credibility with your suppliers and lenders, which can help you grow your business.
How to check your business credit score?
1. Get your credit report
The first step is to get a copy of your credit report from one of the three major credit bureaus - Equifax, Experian, or Dun & Bradstreet. You can also get a report from other credit reporting agencies that specialize in business credit reports, such as CreditSafe or Nav.
2. Check your credit score
Once you have your credit report, check your credit score. The score ranges from 0 to 100, with a higher score indicating a better credit history. Different credit bureaus use different scoring models, so your score may vary depending on the agency you choose.
3. Review your credit report
Review your credit report for any errors or inaccuracies that may be affecting your score. If you find any errors, you can dispute them with the credit bureau to have them corrected.
4. Monitor your credit regularly
Regularly monitor your credit score and credit report to ensure that your credit history is accurate and up-to-date. You can set up alerts with the credit bureaus to be notified of any changes to your credit score or report.
How to improve your business credit score?
1. Make payments on time
One of the most important factors that affect your credit score is your payment history. Make sure you pay your bills on time, as even a single late payment can have a negative impact on your score.
2. Keep your credit utilization low
Credit utilization refers to the amount of credit you are using compared to the amount of credit available to you. Keeping your credit utilization low can help improve your credit score.
3. Maintain a good credit history
The length of your credit history is also an important factor in your credit score. Make sure you have a good credit history by keeping your accounts open and active.
4. Monitor your credit regularly
Regularly monitor your credit score and report to ensure that your credit history is accurate and up-to-date. This can help you identify and correct any errors or inaccuracies that may be affecting your score.
FAQ
What is a good business credit score?
A good business credit score is typically above 75. However, different lenders may have different requirements for what they consider a good score.
How often should I check my business credit score?
You should check your business credit score at least once a year. However, if you are planning to apply for a loan or credit, it is best to check it beforehand to ensure that your credit history is accurate and up-to-date.
Can checking my credit score affect my credit?
No, checking your credit score does not affect your credit. It is considered a soft inquiry and does not impact your credit score.
Can I improve my credit score quickly?
No, improving your credit score takes time and effort. It is important to make payments on time, keep your credit utilization low, and maintain a good credit history to improve your score.
What if I find an error on my credit report?
If you find an error on your credit report, you can dispute it with the credit bureau. They will investigate the error and correct it if necessary.
How long does it take to improve my credit score?
Improving your credit score can take several months to a year, depending on the factors affecting your score.
Can I build credit for my new business?
Yes, you can build credit for your new business by opening a business credit card, making payments on time, and maintaining a good credit history.
What factors affect my business credit score?
The factors that affect your business credit score include payment history, credit utilization, credit history, and other factors such as industry risk and company size.
Pros
Checking your business credit score can help you make informed financial decisions, improve your chances of securing loans and credit, and establish credibility with your suppliers and lenders.
Tips
Regularly monitor your credit score and report to ensure that your credit history is accurate and up-to-date. Make payments on time, keep your credit utilization low, and maintain a good credit history to improve your score.
Summary
In this article, we discussed how to check your business credit score, what factors affect it, and how to improve it. Regularly monitoring your credit score and report, making payments on time, and keeping your credit utilization low can help you maintain a good credit history and improve your chances of securing loans and credit for your business.