It’s also a good idea to check your business credit report after your loan to check the accuracy and the implications for your business credit score. While there may be a handful of information displayed on your business credit report, business units can be some of the most important pieces of your credit history. A business unit is a line of credit between a company and a supplier, which allows your company to pay off your balance at a later date. Traditional and online lenders also offer business lines of credit that can be used for working capital and cash flow. A business owner can follow these steps to help them obtain a business credit line.
As with personal credit, your business credit score will stay with you forever. Missing payments or taking on too much debt sends a red flag to credit rating agencies and potential lenders. Frequent changes in ownership, restructuring, late filing of tax returns, change of bank and relocation also cause a credit institution to think twice before granting credit. Paying bills on time and maintaining a good credit usage history is wise for many reasons and especially when it comes to maintaining good business credit scores. There are plenty of options for extracting business credit reports, both free and paid.
Once the account is opened, your account activity will be reported to your company’s credit reports. Supplier credit, loans, and other lines of credit can be essential to helping your business maintain cash flow and keep up with customer demand. Your ability to obtain financing largely depends on what is included in your business credit reports.
Whether you’re reviewing your own report or evaluating others, Experian has the small business reporting service that’s right for you. Dun & Bradstreet (D&B) offers a business credit score used by many lenders. D&B collects information about public companies and industries, payment history, and financial performance to generate three individual business credit scores.
Dun and Bradstreet, for example, are considered the gold standard for business credit reports. However, you can also get business credit reports through Equifax and Experian, as well as credit monitoring services like Nav or Capital One’s Business CreditWise tool. One of the most powerful tools you have when building credit is to easily pay your bills. By paying your bills in full and on time, you prove that you can pay your debts.
For those bills that can’t be collected automatically, set aside time each week to review your bills and make sure everything is paid for. Most small business lenders like to see a business credit score of more than 75, but local lenders may consider lower scores for small businesses or startups. Conventional consumer finance companies rarely lend driving records to people with credit scores below 500. If you’re willing to pay higher interest rates with stricter repayment terms, there are other options available. The Small Business Administration, banks, suppliers and other commercial lenders rely heavily on business credit scores and FICO scores when providing lines of credit or extended repayment terms.