Investors, traders, lenders, and financial institutions often use business credit scores to judge the current position and future economic capacity of your company. That’s why, as a sole proprietor, it’s important for you to know, maintain, and perhaps improve your credit score so more business doors can open for you. Learn about what a business credit score is, how it benefits your business, how to check it online, and how to improve it for better market positioning.
What Is Your Business Credit Score?
A business credit score is a measure of the financial health of your business. It’s a number influenced by your time in business, revenue, assets, past transactions, debts, details of your current business activities, and, in some cases, the type of industry you’re in.
How To Check Your Business Credit Score
Today, a variety of business and financial organizations offer free and paid tools for checking your business credit score.
Check Your Business Credit Score Online With Free Tools
Dun & Bradstreet (D&B) CreditSignal offers a free tool for checking, monitoring, and learning more about changes to your business credit score. You can sign up for email alerts to stay updated on any changes to your credit score. The tool currently tracks the following credit scores and metrics: D&B Paydex, Delinquency Predictor Score, Financial Stress Score, and Supplier Evaluation Risk Rating. Business-focused site Nav provides free credit reports that offer a summary of the Experian and Equifax business credit reports. You also get a grade for each score, plus some tools to help you improve your current business credit score.
Check Your Business Credit Score Online With Paid Tools
Experian’s business credit report is a paid service offering a pair of one-time credit reports for $39.95 and $49.95 and two yearly options for $189 and $1,495. The tiers vary by the type of information and the number of ongoing monitoring services they provide. The Equifax business credit report is another multifunctional credit report offering a Risk Score that judges the likelihood that your business will be more than 90 days late on a debt payment.
How Do You Improve Your Business Credit Score?
If you are not happy with your business credit score, there are a few ways to improve it.
Pay Your Business Bills on Time
One of the most obvious ways to improve your business credit score is to pay your equated monthly installments (EMIs) and loan payments on time. This is a key element of determining your credit score: The faster you pay, the higher your score goes.
Remove Inaccurate Information From Your Credit Reports
Some canceled payments or disputed issues can make their way into your credit reports, lowering your overall score. Make sure to watch your credit history and make note of any information that doesn’t belong on your report.
Monitor Changes to Your Business Credit Score
Businesses that regularly monitor changes to their credit scores are able to identify potential issues faster and deal with problems that could affect the company’s credit score. If you check your score only when you need funding, you may not be aware of significant negative changes that could hinder the funding process and take a long time to repair.
Work With Vendors and Suppliers That Report Your Payments
Paying your vendors and suppliers on time whenever a bill is due will help you boost your credit score, but only if those companies report your payments to business credit bureaus.
