Financing is a major priority for business owners. Just like you have a personal credit score, your business has a credit score. You need to know what it is and how to manage it. Business credit scores are completely separate from your personal credit score. A business credit report will display the same types of information as a personal credit report, but it is specific to a business’s debt repayment and public records. Here are some tips on why and how to improve your business credit.
- Good habits equal improved scores. When you make prompt payments you are contributing to the biggest factor toward improved scores. Establishing trade relationships will also help your score. If your business stays away from collections and avoids bankruptcies while monitoring their business reports they will be in good shape to maintain a healthy business credit score. A few other habits would be to keep your debt down and your revenue growing.
- Commercial scores support business relationships. When it comes to doing business with another firm or being connected with a business partner, your company’s commercial credit score will be one huge consideration. Your commercial score matters to anyone that extends credit or has to deal with risk within a business relationship. These relationships are not just financial relationships, but are also insurance firms and leasing companies so it is very important to maintain your score for every aspect of your business.
- Credit reports include several types of information. The 4 main types of information credit bureaus keep about you are identifying information, account history, data from public records, and a record of inquiries. This demonstrates that all of the information will either benefit or hurt your business credit score and should always be maintained and tuned up every quarter so you stay on a positive road with your credit report.
Your business credit will also determine what credit will be available to you and your company and will also help set the terms for your available business loans and financing options.