Business Credit Reports and What They Mean For Your Company
Savvy business owners will do well to familiarize themselves with their business credit reports and understand the impact they have on their companies. Rather than bemoan the fact you have to worry about the credit score for your business just as much as you worry about your personal credit score, it’s better to focus on how much your commercial credit score can either hurt or help your business.
What Are Business Credit Reports?
The credit report for your business essentially tells lenders how responsible you are with the credit cards you use for your business. Your score ranges from zero to 100, which is much slimmer than the 300 to 850 range you have for your personal credit score. And even though your business credit report only includes the accounts under the name of your company, lenders still might consider the accounts listed on your personal credit report, so be sure to keep that in mind as you use your personal credit cards.
While your personal credit report is a personal matter seen only by you and a few select parties, the credit report for your company is made available to the public. This means that your customers, employees, competitors and anyone else is free to see your most current score. On the other hand, this also means you can request the credit reports of any other businesses about which you might be curious.
What They Mean
In regards to what your business credit report means for your company, it determines your overall creditworthiness to vendors and lenders. Just as they want to see how much of a risk they might be taking giving you a personal loan, the same applies to a business loan. A good score can speed up the lending process and keep interest rates low on future business loans, or it can lead to delays and steep interest rates.
Something else to think about is that another company or individual might take a look at your credit report before deciding whether to work with you. Even if you aren’t pressed for liquid capital, you might be pressed for a good business partnership to help take your business to the next level. Not having a good score just might cost you the business deal of a lifetime.
While you have to pay to receive your business credit score, it’s often worth it in the long run. For tips on ways you can improve your company’s score, be sure to sit down with a financial expert. Contact The Capital Lenders for any advice.