Consumer credit scores can be complex to understand, but you have another layer of information to process if you are, or want to be, a business owner. Just as your credit history gives you a credit score, businesses also have a credit score that reflects their overall creditworthiness.
Business credit scores are used for the same purposes as individual credit scores. When you apply for a business credit card or small business loan, the company you applied for a loan from uses your business credit rating to determine your company’s creditworthiness, interest rates, and loan terms.
Like a personal credit score, a higher business credit score is always better when getting the best interest rates and terms. While individual credit scores usually range from 300 to 850, business credit scores typically range from 1 to 100.
How to Check Your Business Credit Score
One of the most important things you can do for your business is to keep an eye on your business credit score. This number will give you an idea of how well you’re managing your finances and can also help you get loans or lines of credit in the future. There are a few different ways to check business credit score.
Dun & Bradstreet
Dun & Bradstreet is a business credit reporting agency. Their website provides you with a free business credit report, which you can use to check your current score or see if there are any errors on it. This report will give you an overview of your business credit history and scores. It is important to check your business credit score regularly to make sure that you are maintaining a good credit rating. Dun & Bradstreet offers various services to help you monitor and manage the creditworthiness of your business. While you can pay $39 per month for D&B CreditMonitor’s premium plan, they also offer a CreditSignal Plus plan for $15 per month and a free CreditSignal basic plan. Both plans allow you to view and monitor your Dun & Bradstreet business credit score over time. Premium plans include benefits such as dark web monitoring, industry benchmarking, and adverse business event notifications.
Thanks to its online platform, Dun & Bradstreet makes it easy to sign up for an account and get started. Overall, this company is best suited for someone who wants to see their business credit score and how their business credit profile has changed over time.
Experian
Experian is one of the three major credit bureaus in the United States. Along with Equifax and TransUnion, Experian keeps track of businesses’ credit history. This information is then used to generate a business credit score, which lenders use to determine whether or not to extend credit to a business.
To check your business credit score, visit their website and click the “Order Report” button. You’ll need to provide basic information about your business, including your business name, address, and tax ID number. Once you’ve submitted this information, you can access your report online.
Your Experian business credit report will include your payment history, outstanding balances, and credit utilization ratio. This information will help you understand where your business stands regarding its creditworthiness. If you see any negative information on your report, take steps to correct it as soon as possible. Maintaining a good business credit score will make it easier for your business to get the financing it needs to grow and succeed.
Equifax
Equifax is one of the three major credit bureaus in the United States. Along with Experian and TransUnion, Equifax compiles information on your business’s credit history to produce a business credit score. Lenders use this score to determine whether or not to extend financing to your business. You can check your business credit score for free on NerdWallet. Create an account and enter your business information. Within minutes, you’ll be able to see your Equifax Business Credit Score, which ranges from 0 to 100.
If you’re looking to improve your business credit score, there are a few things you can do. First, ensure that all your financial information is up-to-date and accurate. This includes paying your bills on time and keeping an excellent credit-to-debt ratio. Consider diversifying your sources of financing, as this will show lenders that you can get funding from multiple sources. Finally, make sure to monitor your business credit report regularly so that you can catch any errors or negative information that may be reported about your business.
Why Are Business Credit Scores and Ratings Important?
It is important to check your business credit score and ratings for several reasons. Perhaps most importantly, they give potential lenders an indication of your creditworthiness – that is, how likely you are to repay a loan. This information can be crucial in determining whether or not you will be approved for financing.
In addition, business credit scores and ratings can also impact your insurance premiums and the terms of your lease agreement. And if you ever find yourself needing to dispute a negative item on your credit report, having strong business credit will give you more negotiating power.
Maintaining a good business credit score is essential to being a responsible business owner. By monitoring your score and taking steps to keep it high, you’ll be positioned for success both now and in the future.
How to Improve My Business Credit Score?
You can improve your business credit score by paying on time and ensuring you have a manageable debt. The best way to do this is by creating a plan for paying off your debt, which will allow you to make better financial habits in the future.
When it comes down to it, there are two main reasons why people want their credit reports: one is because they think that it’s crucial for their safety; the other reason is so that companies can see how responsible someone is with money (like applying for loans).
Conclusion
Hopefully, this article has helped you understand how to check business credit score and what it means for your finances. If you have any questions or concerns, don’t hesitate to reach out!
