In how a business cr it score is calculat , and each cr it reporting agency uses a different combination of factors. However, there are some common factors that may affect your cr it score, regardless of the cr it reporting agency, including:
Payment History
Collection History
Lawsuits, Liens and Judgments
Cr it Utilization Rate
Public Records
Company size
Industry risks
Why build business reputation?
The most compelling reason to establish and build business cr it is the impact it will have on your business’ borrowing power. When you apply for small business funding from traditional lenders like banks and the SBA, as well as alternative lenders, having a good business cr it score greatly improves your chances of approval.
A good cr it score can also improve your chances cameroon phone number library of getting better small business financing terms. Businesses with good cr it scores can often qualify for higher interest rates and terms, as well as larger loan amounts.
Establishing and building business cr it not only improves your borrowing power, it also has many other advantages, including:
Protect your personal assets. Before you build good business cr it, you may ne to sign a personal guarantee to open a cr it card or apply for a loan. This means you will be personally liable if your business can’t pay what it owes, and your personal assets will be at risk. Once you build business cr it, you can qualify for a business cr it card or other small business funding without a personal guarantee.
Better terms with vendors and suppliers
In addition to better access to financing from traditional and alternative lenders, a good cr it score can also improve your repayment terms with vendors and suppliers.
Lower insurance premiums. The history provid in 36 best linkedIn tools complete list your cr it report is a good indicator of whether your business is likely to pay its insurance premiums on time. Therefore, a strong business cr it score may result in lower insurance premiums.
R uce prepayments. Good cr it tells vendors and suppliers data on that you can be count on to pay your invoices on time, which means you may not ne to pay upfront for the products or services you purchase.
How to Establish Business Cr it for the First Time
If you’re not sure whether you already have establish business cr it, you can check your cr it score (for a fee) at one of the three major business cr it bureaus: Dun & Bradstreet, Experian, and Equifax. If you use a personal cr it card to pay for business expenses, it’s likely that you don’t have business cr it.