Business Credit Scores

When asked, most people will know what a credit score is; they may not know their own credit score or why it is so important, but they will have a cursory knowledge of the term. Simply put, a credit score is a number assigned to an individual or business that rates how creditworthy they are. The higher the score the better. Persons or businesses with higher scores have received the higher score because they consistently pay their debts when they are due. Having good credit does not mean that a person or business is without loans, it simply means that they have handled their loans responsibly and are not delinquent on their payments.

How Business can find out their credit score

As a business owner, being aware of your credit score is very important and there are a few different ways in which you can ascertain just what your score is. Experian is a large company that operates both abroad and in the United States. They collect and store data on millions of people, vehicles, and business, and one of their main functions is providing credit reports. By law, you can receive one free credit report from Experian per year. Another company offering credit reports is Equifax. Having been in business since 1899, they do have the most experience, but only started offering business credit reports in recent years. Equifax also allow companies to research the credit history of their customers for a small fee. The final, major credit reporting company is TransUnion. They like their competitors will provide credit information on individuals and customers alike. Anyone seeking out credit report information should be weary as all three companies have been sued for either misuse of information or incorrect data on personal reports. So be sure to check with all three companies to ensure you are getting a fair score and that all your information is correct.

The Good the Bad and the Management

A simple truth about credit scores is that you will be rewarded for a good one and sometimes limited because of a bad one. Credit scores can be used to determine whether or not you are eligible for a loan or credit card. These things are very important to the daily operations of any business. If, as a company, you have a poor credit report, you will be less likely to get credit cards and small business loans because other companies or banks see your business as a financial risk. Having good credit will lower your risk and prove that you are a responsible business person running a sound and profitable company. There are many different options available when it comes to managing your company’s credit, but one of the more popular ways is through the use of a company called Dun and Bradstreet. They offer small business the opportunity to establish and manage their credit report, monitor other businesses reports, and create effective advertising and more. This is not a free service, but one that may be helpful to smaller businesses that are struggling to maintain a good credit report.