In your personal life, you’ve probably applied for loans such as mortgage loans, auto loans or even student loans. If you’re among the millions of people in these categories, you know how critical it is to maintain a good credit score. After all, lenders use these scores to determine whether you can pay back the money in a timely fashion. It’s not much different in a business setting. If you’re considering a small business loan or other lending options for your company, your business credit report is essential. Just like in your personal life, there are important facets of this other type of credit you must be aware of.
You’re no doubt familiar with the score range when it comes to personal credit, but it’s a little different on the business credit report side. For your personal credit score, your numbers will fall somewhere in the range of 300 to 850. The higher, of course, the better; scores in the upper range signify that you pay bills on time and that lenders can feel comfortable lending you the money you need. With business credit report, you’ll have a score anywhere from zero to 100. Where your score falls is also an indication how well you pay your debts.
How to get Your Score
It’s nice to know where you stand before you seek a loan. Think of the uncomfortable feeling and potential embarrassment of a bank denying your loan due to a low score when you may have had no idea you were on shaky ground. You can access your personal credit score for free every 12 months; however, you’ll have to pay for this data for your business when you want to know your score with Dun & Bradstreet, Equifax and Experian.
Matters of Privacy
You don’t want your personal credit score falling into the wrong hands, so it’s just as important to safeguard your information when it comes to your business. It’s important to be aware, however, that unlike personal credit information, your business score is public record, so anyone interested can check it. Of course, another party must pay for this information, just as you would need to pay for the score of another business.
Your business credit is essential to the health of your company, especially if you are trying to secure a loan for more funding. If you know you’re in a position where you need more resources for equipment, supplies or manpower, make sure you’re on solid footing as far as your credit goes. Give us a call to ask any questions you have.