Having a nine-digit D-U-N-S number® allows other companies or the government to make an informed decision about whether or not to lend to you or work with you. Bad credit reports track your business wherever you go and can certainly work against you and your ability to do business. Business credit reports are created by the collection of information by numerous commercial credit bureaus.
If you’re a business owner, setting up business credit can help protect your personal credit, secure competitive loans, get better insurance rates, and more. While business credit scores are similar to personal credit scores, there are some key differences. Whether you like it or not, business credit scores are an important tool that most small business loan companies use to decide credit checks if you’re getting the loan you need. Typically, lenders consider both personal credit scores and business credit scores, paying attention to all of the factors discussed above. The credit department of banks provides loans to companies with strong credit scores and profiles. A favorable corporate credit report clearly shows that a company can meet its financial obligations.
As a consumer, you probably have a few different sources for your free credit reports and scores (we’ve found over 150 places where you can get your scores for free). Many business credit reference agencies require you to pay to view the information they have about your business. Strong business credit scores can be key to getting your business approved for business credit and financing. If you’re a small business owner, you’ve probably considered ways to raise money to grow your business.
It’s important to check your business credit score regularly so you can learn more about the financial health of your business. It’s a number that many providers, lenders, and other businesses want to know so they can decide how risky it would be to work with you. It can also have an impact on the interest rates you pay on loans and lines of credit.
As with personal credit scores, business credit scores provide powerful insight into how successful a business is for potential creditors, investors, and business partners. Experian also allows you to check your business credit score and business credit report, although the amount you pay depends on the plan you select. You can view your business credit report for as little as $39.95, but you can afford an annual plan that allows you to check your business credit reports and score $189 per year. The credit report itself can also contain a lot of information that lenders can review before approving or denying your application.
Some of the major business credit bureaus include Dun & Bradstreet, Equifax Small Business, and Experian Business. Having loans, credit cards, and checking accounts with vendors in your report (with timely payment histories) can help your credit scores. You can ask providers which business credit bureaus they report to, if applicable.
All or one of these business credit reports are used to assess a company’s payment habits and financial responsibility. Your personal credit score tracks your personal relationship with credit through your loans, credit cards, and the payments you’ve made on both. Your business credit score works the same way, except that it represents your company’s loan history. Both are calculated by credit bureaus to classify the financial health of a company or individual.
Similarly, your company name and EIN credit bureaus help to link the right accounts to your company’s credit history. It’s like how consumer credit reports are linked to people using personally identifiable information, such as their name and Social Security number. It is possible to have a good personal credit score and a bad business credit score, or vice versa. To find out your business credit score, you’ll need to pay a credit bureau to produce a business credit report. While business credit reports are similar to personal credit reports, there are some differences. First, you have free access to your personal credit report once a year, from all three credit bureaus.
FICO’s Small Business Scoring Service is the only agency that includes personal credit scores. That makes it possible for an investor or supplier to view a business owner’s personal credit reports, as well as the company’s financial obligations and credit reports. Qualification is required by the SBA for loan applications and is also required by many other lenders.
If you’re applying for the SBA 7 loan, you’ll need a personal credit score of 600 or better. The FICO SBSS will be a number from 1 to 300, with 140 needed for the SBA 7 loan. There aren’t many free resources available for business credit reports because credit bureaus are not required by law to provide free copies of business credit reports.
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