What is Your Business Credit Score?

Did  you know that your small business has a credit report and score too? You are probably aware of personal credit and the importance of keeping your personal credit rating high.  Having a high business credit score is even more important, for you and your business.

Establishing Business Credit.  If you are starting a small business, you may need to rely initially on personal credit to get loans, but you should quickly begin to get business credit so that you can use this credit for future business loans.  You establish business credit by buying from suppliers and vendors and paying your bills.  Having a business credit card that you use for business purchases also adds information to  your business credit report, and bank loans certainly provide information to credit reporting agencies.

Why Build Business Credit. The higher your business credit score, the higher your rating with a potential lender, and the greater  your ability to negotiate favorable interest rates and terms with lenders. Your business credit score also affects your ability to attract potential investors, do business with suppliers and vendors, and lower your business insurance premiums.  So it’s worthwhile to take the time to work on increasing your business credit score.

Who Checks Your Business Credit. Your business credit report is easy to obtain by just about anyone, for a fee.  The report can be reviewed by a bank or lender, but also by suppliers and vendors, credit card companies, and also by customers (probably only business customers).

Check Your Business Credit. You can check on your business credit by purchasing a business credit report from Experian or other credit reporting bureaus.  Use your credit check to:

• Correct errors in the report
• Remove old negatives
• Look for credit theft and protect your credit rating
• Build your business credit rating
• Get ready to have your credit reviewed by a bank or lender

Checking your own credit periodically can give you some assurance that you are maintaining a high credit score.  You never know when you will need to use your business credit for an emergency.

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