Sep 8, 2016
Understanding Your Business Credit Score
Did you know that, just as you have a personal credit score, your business has a credit score—and that maintaining a good credit score is as crucial to your business as your personal credit score is to you?
Like personal credit scoring, business credit scores provide a quick view of risk potential based on where the score falls on the scale. The higher the score, the lower the risk. Unlike personal credit scoring, business credit scores use a scale that ranges from 0 to 100.
A business credit report is used to present a current, objective picture of how a business manages its financial obligations. Information in business credit reports provided by Experian® is either from a third-party source or is third-party verified. This non-biased, reliable data allows for an objective view of a company’s overall financial health.
What’s in a Business Credit Report? A business credit report may include:
- Actual trade payment experiences: number of trade experiences, balances outstanding, payment habits, credit utilization, trends over time
- Public record information: recency, frequency and dollar amounts associated with liens, judgments, bankruptcies
- Company background
- Collections information
- Comparative data placing a QuickLink Check your business’s credit score with SmartBusinessReports.
- company’s payment performance in context within its industry
- Demographic information: years on file, Standard Industrial Classification (SIC) code, business size
Why Does My Business Credit Score Matter?
Business credit scores are vitally important to your business. Of course, good credit is a must for obtaining funding for launching or expanding your business. But that’s only the beginning. Here are just a few of the many benefits of a good business credit score.
- It can save you money. Lenders offer better interest rates to businesses with good credit. • You can obtain business credit without the need for a personal guarantee. This reduces your personal liability and protects your personal assets.
- It can help you stay ahead of your competition. You can pass your interest savings onto your customers or keep a larger margin of profit for yourself.
- You can make decisions with confidence and get the money you need.
Most lenders reference your commercial credit score when making lending decisions. In today’s competitive market, a bad credit score can dramatically affect your business’s bottom line.
Provided by Experian
Experian is the leading global information services company, providing data and analytical tools to clients in more than 90 countries. The company helps businesses to manage credit risk, prevent fraud, target marketing offers and automate decision making. Experian also helps individuals to check their credit report and credit score and protect against identity theft.
Experian and the marks used herein are service marks or registered trademarks of Experian Information Solutions, Inc. Other product and company names mentioned herein may be the trademarks of their respective owners.