When you own a business, it is important to separate your personal finances from your company finances. It is also important to create a credit “track record” and monitor your individual and business credit scores and be mindful of who you work with. One way to check the reputation of a potential partner is to use business credit reports to determine possible risks.
Major credit reporting agencies such as Equifax, Experian, Transunion and Dun & Bradstreet provide detailed business credit reports online. These reports provide valuable information that enables companies to monitor a current or potential partner’s business reputation, any credit-related inquires, timeliness of payments, etc. These are some things you should know about business credit reports.
- Business credit scores operate differently than personal credit scores.
- A credit score is a business’s credit rating based on a scale of 0 to 100, with 100 being the best.
- While you can often access your personal credit report at no charge, you may need to pay a fee to view your business credit report and history.
- You will probably be required to pay a fee to get a business credit report on another company.
Business owners submit requests for an Equifax, Experian, D&B or TransUnion business credit report to help them make informed business decisions such as the following:
- General Risk Management
- Credit Risk Mitigation
- Revenue Generation Management
- Operational Efficiency
- Business Credibility
A credit report for your business is public information. Unlike your personal credit, every prospective buyer, seller, or associate can access your business credit history. A low credit score can harm your company's reputation because it indicates you are not running your business responsibly. So, it is important to monitor your credit rating and credit history because it could impact your ability to obtain credit when you need it.
Your business's credit rating and the score must show that you run your business efficiently, that you can pay your bills, and indicate that your company is healthy and generating revenue. Companies that considering doing business with you care about these qualities and they will be key decision factors if they are evaluating whether or not to work with you.