A business’s credit score is one of its most important traits: A strong one can make obtaining loans easier, while a weak one can make the same task exceedingly difficult. Lenders use business credit scores to determine the likelihood of a loan being repaid. To help you get a grasp on the topic, this article looks at the ingredients that go into making a business credit score and how to obtain a credit report on your business.
The Age of Your Business
The age of a business factors into its credit score. Generally speaking, the longer a business has been active, the better its credit score will be, especially if it shows a long record of responsible credit usage. Taking out a small line of credit is one way for your business to begin building a long, healthy credit history from the get-go.
The Size of Your Business
A business’s size is another factor in its business credit score. In general, smaller businesses may be rated less favorably than bigger businesses. However, a business being large doesn’t mean its credit score is automatically bulletproof, as other factors (such as late payments) may affect it.
One of the most critical elements in a healthy business credit score is a history of on-time payments. Conversely, late payments can severely damage a business credit score, so make sure you don’t borrow more than you can pay back on time.
Obtaining Your Business Credit Score
The three main firms that assess business credit scores are Dun & Bradstreet, Equifax, and Experian. Each uses somewhat different methods in their assessments. To purchase a credit report from each agency, visit their respective websites.
Other blog posts from Business Capital Providers can help you learn more about various business topics, so be sure to check them out.