Business Credit Report
Business Credit Report -
A business credit report is very much like your personal credit report. Instead of tracking your timely payments on the personal side of your life like a personal credit report does, a business credit report tracks your timely payments on the business side of your life. It is best practices to separate your business credit from your personal credit. This will allow you to gain more access to business loans and lines of credit from vendors, take advantage of more business opportunities, and show potential buyers or investors that you know what you are doing when it comes to operating your business.
In order to see your business credit report you must first establish seperate business credit from your persoanl credit.
Get Started on Building Your Business Credit
You can view your business credit report from the three main business credit reporting agencies.
Dun & Bradstreet
Experian
Equifax
Each one of these business credit reporting agencies score your business credit report a bit differently. It is important to have a positive business credit score with all three business credit reporting agencies. Dun & Bradstreet gives each business that has established business credit a PAYDEX score. The PAYDEX score is what every business loan lender is going to look at when they pull your business credit report. The PAYDEX score pretty much tells a small business loan lender how timely you make your payments and how risky you are as a borrower. Timely larger payments will effect your PAYDEX score greater then timely smaller payments. It is always important to make all payments on time but it is much more important to make sure you are making your larger payments on time. Dun & Bradstreet will not give you a PAYDEX score until you have at leasy four creditors reporting your payments to Dun & Bradstreet.
Check Your Business Credit Score
Your Dun & Bradstreet PAYDEX score can range from 0 – 100. The best PAYDEX score your business can have is 100. Banks and small business lending institutions would like your PAYDEX score to fall on a number that is anything higher then 70. This tells lenders that you make your payments in a timely enough fasion to where you deserve a business loan. You can increase your PAYDEX score by paying your creditors earlier then when the payment is due. If you pay all your creditors on the date of your due date every time, then you will most likely have a PAYDEX score between 70 and 80. This is a suficient enough PAYDEX score to be approved for a small business loan. In order to increase your PAYDEX score over 80, you need to pay your current creditors earlier then the due date. If your payment to a certain creditor is due on the 15th of the month and you pay it on the 5th, then you have paid ten days earlier which will push your PAYDEX score higher falling between 80 and 90.
To improve your PAYDEX score you must pay your bills earlier
then the due date
Dun & Bradstreet is the largest business credit reporting agency in the world and houses most of the the business data in North America. Most lenders will choose DnB for their business credit data. DnB only tracks and scores the last 875 transactions across all your creditors combined. Most small businesses won’t hit this limit before they need a small business loan.
Here are a few different articles, webinars, and podcasts on business credit.
How Long Does Building Business Credit Take?
Small Business Credit - Is It Different From Big Business Credit?
How To Get Business Credit.
How Business Credit Ratings Can Help You Grow Your Business.
Back To Business Credit
