Key Success Element #3 - Business Credit Scores
Business Credit Scores: The Third Key To Financing Success
Your business must have strong business credit scores that are separate from you personally. Business credit scores now play a major role in business financing, determining how much your business gets approved for, what interest rate you pay, and what length of payment term you receive — and most large corporate and SBA lenders have factored them into their underwriting guidelines.
Run Your Free Business Success Scan NowWho Reports Your Business Credit Scores
Three major agencies collect and report on your business's creditworthiness:
Experian Business
Experian is the leader in personal credit reporting and has ventured into business credit reporting. A trade line is any company that sends payment histories into a business credit reporting agency. If you have a business credit card, equipment or vehicle lease, or a corporate account with any large supplier or retailer, they are most likely reporting to Experian Business.
Equifax Business
Equifax has been in business credit reporting for a long time. They used to be called the "Small Business Financial Exchange" and only gathered credit information from member banks. While they have branched out from this practice, their major reporters are still banks — therefore, anything your bank knows about you, so does Equifax.
Dun & Bradstreet
Dun & Bradstreet is the oldest player of the business credit reporting agencies. Its reporters are primarily vendor credit lines — businesses that extend credit to other businesses on "Net 30" credit terms. If you have vendor credit lines for products or services that give you 30 days to pay, they most likely report your payment history to Dun & Bradstreet.
Why Your Business Credit Scores Matter
In today's economy, your business needs all the help it can get to obtain the financing it needs to grow and succeed. Because business credit scores are now a determining factor in how much you get approved for, your interest rate, and your payment term length, weak or missing scores can quietly cost your business better financing terms.
The Bottom Line
After you take the business success assessment, we walk you through first checking your business credit scores and then building strong business credit scores that can help your business obtain larger amounts of financing and on better terms.
Find out where your business stands with Experian Business, Equifax Business, and Dun & Bradstreet before you apply for financing.
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