What Your Business Credit Score is Trying to Tell You

If you’ve received a business loan or have a company credit card, you’ll be able to generate a credit score for your business. This score is much like a personal credit score as it analyzes your outstanding debt, your payments, and your open lines of credit. Dun & Bradstreet, Experian, and Equifax are the three main business credit bureaus, and you’ll have to pay to get your credit score from them.

Your score is public and lenders, investors, insurance companies, and the general public can access your score as long as they pay for the report. Naturally, if you have a bad credit score you’ll probably have trouble getting loans, investors, or affordable insurance for your business, so it’s important to keep debts low and make payments on time to keep your score up.

There is no industry standard in the business credit industry, so some are scored from 1-100 while others are scored in the thousands. Some simply give you a score while others will give you more extensive results including your payment history, likelihood of business failure, financial trends within your company, or comparisons with other companies in your industry. Do your research to decide which bureau’s report will provide the most beneficial information for your business.

While each report is a little different, they all have one thing in common: they’re giving you crucial financial information for your business that you can use to improve how you run things. That’s why it’s often worth paying extra for a more detailed report, especially ones that tell you the chances of your business failing in the next 12 months. It could be the heads-ups you need before your company goes under, so you can make necessary changes now.

Your business credit score can also tell you how you stack up against other companies in your industry. Competition is a huge factor in business, so it never hurts to find out how your opponents are doing. If your score is low and doesn’t stack up well against your competitors, it’s probably time to make some changes to ensure your business doesn’t fall to the competition.

With a financially secure business, you’ll have a much better chance of being a successful company overall. It’s important to be aware of your finances at all times, and your credit score can help you do that. If you read into what your score is telling you, it truly can be the difference between your business thriving or failing.

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