A business credit report, maintained by the major credit bureaus, provides a birds-eye overview of a small business's credit history, payment trends, and finances. Banks, small business lenders, and other companies use credit reports to evaluate a business's financial health and determine its ability to repay loans and other financial obligations.
If you're a small business owner, keep reading this Huddle Business Capital blog article. It features information about business credit reports you need to familiarize yourself with.
What's included in a business credit report?
As mentioned above, a business credit report summarizes a company's credit profile, including its payment history, outstanding debts and credit card balances, and recent credit and loan applications. Business credit reports may also include information on legal filings, such as bankruptcies or tax liens, as well as details about the company's ownership structure and industry classification.
Credit reporting bureaus have their own method of compiling credit-related data and credit scoring, but they each provide the same type of reporting and information.
Where to get a business credit report.
If you run a small business, it is important to regularly review your company's credit report to ensure that everything is up-to-date and that no errors are present. The top three business credit reporting agencies are Dun & Bradstreet®, Experian®, and Equifax®. You can purchase your company's credit report from these credit bureaus.
Some credit reporting companies offer limited reporting information for free. However, if you want a comprehensive credit report, you must pay to have a one-time report generated. If you run a startup business, your company might be too young to have a credit report, and you can confirm this by contacting one of the credit bureaus.
Review your credit report for discrepancies.
It is recommended that you regularly review your credit report to identify any discrepancies that may be affecting your credit score. By doing so, you can ensure that your credit report accurately reflects your credit history and that no unauthorized or fraudulent activities are associated with your credit accounts.
If you pinpoint one or more errors in your report, it is important to take action as soon as possible. Contact the credit reporting company that provided you with the report and file a dispute. Make sure to provide any necessary documentation or evidence to support your claim and request that the company investigate and correct the errors. Finally, follow up with the company to ensure the dispute has been resolved and the corrections have been made.
How a business credit report impacts borrowing.
Credit reporting bureaus provide comprehensive business credit reports that include information about a business's financial history. One component of these reports is the credit score, which represents the business's creditworthiness based on its credit history and other financial data.
The credit score provides a quick and easy way for lenders, suppliers, and other creditors to assess a company's creditworthiness and make informed decisions about extending credit or entering into business relationships. If you have a good business credit score, you have a better chance of securing business funding with favorable rates and terms. Conversely, obtaining funding can be challenging if you have a poor credit score.
How to improve your business credit score.
If you have reviewed your business credit report and found that your business credit score needs improvement, there are several steps that you can take to improve it. First, identify and address the factors that are negatively affecting your credit score. This may include late payments, high credit utilization, or errors on your credit report. Once you have identified the problem areas, you can fix them by paying your bills on time, paying down outstanding debt, and disputing any errors on your credit report.
It's also essential to maintain good credit habits in the future, such as keeping your credit utilization low and periodically checking your credit report for any errors or inaccuracies. Doing so can gradually improve your business credit score and establish a strong credit history.
Disclaimer.
This Huddle Business Capital blog article is purely educational and contains general information and opinions; it is not intended to provide advice or recommendations of any kind. Huddle Business Capital is not affiliated with nor endorses Dun & Bradstreet®, Experian®, or Equifax.®
