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What is Your Business Credit Score?

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Business Credit & Growing Your Business

Many business owners are unfamiliar with business credit, how it works and what the advantages are. According to Entrepreneur.com, regarding a study completed on small businesses and business credit, stated “the study revealed that a primary reason small businesses can’t obtain bank loans is their failure to understand their business credit score. Some 45 percent of entrepreneurs surveyed didn’t even know they had a business credit score. And 72 percent didn’t know where to find information about it. Even when they did, more than eight in 10 small business owners surveyed acknowledged that they didn’t know how to interpret their score”.

Understanding business credit is one of the most powerful tools that a business owner has to grow their business. It allows them to separate their personal credit from the business, and with a proper business credit file they can borrow more money and get better terms from vendors. 

Building your Business Credit also builds your business reputation. The business stands alone and separate from it’s owners. It is even proven that businesses that have a reputable business credit file sell for more money, grow 20-50% faster, and have more control over cash flow.

From Ivestopedia.com

A data universal numbering system (DUNS) number created by Dun & Bradstreet has become so useful today that it now identifies over 260 million businesses globally including major corporations, small business owners, nonprofit organizations and partnerships. As of 2017, its users include the US government, the United Nations (UN), and the European Commission.

Business VS Personal

Personal credit is an important asset to your personal life.  It’s how you buy your home, your cars and get your credit cards for travel and other purchases.  Personal Credit ratings take into account many factors, many of which may limit the amount of money you can borrow. For instance simply applying for more credit can cause a red flag due to the amount of inquiries.  Personal credit also means that you are personally liable for the debt thus allowing creditors to come after you personally, they can even attach your home.  Using personal credit for business it creates personal risk and limits the amount of money that is available.

Business credit is built on the credibility of the company. It treats the business as it’s own entity, keeping it sole and separate from the owners personal credit profile. The business is able to build its own credit file based on the timely payments made to vendors and lenders. Business Credit puts most of its emphasis on the way the business pays it’s bills, while inquiries and balances have little impact.  

Whether you are a start-up or an tenured business, building a credit profile can be a great influence on your business growth. Many established businesses may already have some sought of credit file established with out even knowing it. That report may include something detrimental on it that may impact the businesses ability to get approved by a lender or vendor.

Uncovering The Mystery of Business Credit

Reviewing a Business Credit Report does not take special authorization. Vendors, lenders, and contract providers may review your file to decide whether to do business with you. The biggest secret maintained by the big banks is that they will not provide you a reason why you have been declined. The reason for the decline could be as simple as not having your company listed properly on the internet or lack of or derogatory information on your business credit file. Read More

The History of Business Credit

Even before personal credit reporting came about there was business credit. The roots of business credit go back to 1841 with the Mercantile Agency in New York City, which is better known now as Dun & Bradstreet, who is the largest business credit reporting agency in the world.

There was much conflict in those days, people thought that this type of reporting was a violation of their rights……..  Read More

Business Credit Report Agencies

There are various credit reporting agencies, from Dun & Bradstreet to Experian. Each one is similar as far as the information they provide but each one also have their differences and user base.   

Although Dun & Bradstreet is the largest reporting agency in the world various lenders rely on Experian or other business credit reporters for their information. This makes it very important you maintain a well rounded credit file………..Read More

How to Build Business Credit

Building Business Credit first starts with getting everything in order, and following certain criteria that will assure that your credit building experience goes smoothly. 

Building your credit profile takes a full circle approach.  When someone looks at your profile to advance you credit they are not only looking to see how you pay your bills, they are looking to see the authenticity of your business. This means preparation and setting your business up to be found easily and in a unified manner….Read More

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