Nov 01, 2022
Your company's financial health may be evaluated using a business credit score. It's a figure that may be affected by the length of time you've been in the company, the amount of income you bring in, the assets you own, the prior deals you've made, the amount of debt you owe, the specifics of your ongoing business operations, and in some situations, the sort of business you run. Lenders and investors want to limit the danger of losing their money; therefore, they prefer to lend to firms with a favorable credit history, including paying off debts on time. Businesses with a great credit past are less likely to default on their loans. For instance, a small firm with a steady financial history, with few missing or late payments, and a better credit score indicates that investing in the company is a secure alternative.
Checking your company's credit score may now be done using a wide range of tools, both free and for a fee, that businesses and financial institutions offer today.
A free tool called Dun & Bradstreet (D&B) CreditSignal is available for checking, monitoring, and gaining further knowledge on changes to your company's credit score. You can keep track of any changes to your credit score by signing up for email notifications of such changes.
A website with an emphasis on business. Nav offers free credit reports that include a summary of the Experian and Equifax business credit reports. These reports may be accessed on their website. You also get a grade for each score, in addition to some resources that might assist you in improving the company credit score you now have.
The Experian Business Credit Report is a paid service that provides two alternatives for annual reports, one costing $189 and the other $1,495, along with a pair of one-time credit reports that range in price from $39.95 to $49.95. The different levels each provide a different kind of information and a different amount of different kinds of continuous monitoring services.
Another versatile credit report option, the Equifax business credit report, provides a Risk Score that evaluates the risk that your company would be more than 90 days late on a debt payment.
You may do a few things to increase your company's credit score if you are not satisfied with it.
Paying your EMIs and loan payments on schedule is one of the most straightforward methods to boost your company's credit score. This is an important factor to consider while generating your credit score: Your score will improve based on how quickly you make payments.
Your credit report may include information about canceled payments or contested problems, which may negatively impact your total score. Be careful to keep a close eye on your credit history and note any material that appears on your report that should not be there.
Suppose a firm monitors the changes to its credit score regularly. In that case, it will be able to recognize possible difficulties more quickly and respond appropriately to concerns that may impact the company's credit score. If you check your score when you need money, you may not be aware of big negative changes that might slow down the process of getting funding and take a long time to fix. You may miss these changes if you examine your score only when you need funding.
Increasing your credit score may be accomplished by making on-time payments to your vendors and suppliers whenever a bill is due; however, this will only work if those businesses record your payments to business credit agencies.
A company credit score of 80 or greater is considered "excellent." An "excellent" corporate credit score may range from 300 to 850. A credit score for a company may be anything from zero to one hundred, with one hundred being the best possible score. If you have a decent score, you may be eligible for low-interest financing via programs like those offered by the Small Business Administration.