These factors help companies save money, improve cash flow, seize opportunities when they arrive, and grow at a healthy pace. In addition, creating business credit using a business credit card can change the financial focus of the business owner’s personal credit, which is often used to start a business. The credit report itself can also contain a lot of information that lenders can review before approving business credit checks or denying your application. And companies can review each other’s business credit reports before deciding to collaborate. As a result, even if you have a high credit score, you may be denied a loan or contract based on something in your credit history. When a small business lender reports payment history to Experian, it can help create and improve your business credit profile report and score.
All business accounts, not only loans, but also recurring expenses such as utilities and leases, should be determined in the name of your company. You should also make sure that your business suppliers report your payment history to a business credit bureau. 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.
You can talk to a credit reporting agency to assess your credit score, some, such as Equifax Small Business, offer consulting services to help you manage your business credit profile. If you use credit cards to fund your business, stick with business credit cards for those expenses. Avoid charging personal expenses on business cards or business expenses on personal cards. Dun & Bradstreet, Equifax Business, and Experian Business are the best agencies that track business credit scores, but checking their reports will cost you. However, it’s worth keeping track of your company’s credit scores, especially if you’re considering applying for a business loan in the near future.
Finally, you’ll want to track your score throughout the year to make sure your score accurately reflects the positive financial habits you’re developing. Register your company legally and apply for a federal employer identification number and a D-U-N-S number®. Buy a business credit card and bank account and make all your business purchases with them.
However, Dun and Bradstreet, Equifax and Experian have policies for business owners to dispute errors or inaccuracies. Some third-party sites offer notifications to businesses when their credit scores at large agencies change. This can be a good option to check your credit score throughout the year. Another option is to contact individual business credit reference agencies yourself. It’s not complicated to do this, but you may need to register directly with agencies including Experian, Dun & Bradstreet, and Equifax. Having good credit is always the goal, but when it comes to business credit, it’s also important to understand how bad credit can affect your business.