Deciphering Your Company’s Business Credit Score
A good business credit score can do a lot for your company. As an indicator of how likely your company is to pay back funds, it can open doors for loans, lines of credit and equipment leases, just as a few examples. Establishing this credit can also help you protect your personal credit score, so you don’t have to worry about your business decisions impacting financial decisions in your personal life. Here are some basics to understanding credit scores for businesses and how you can use it to your advantage.
These credit scores look different than personal ones, so don’t be startled if you see a “low” score. They tend to be anywhere from 0-100. Even though you can see your personal score for free through various avenues, you can see your company’s credit only after paying a fee to specific institutions. Don’t let the fee put you off. It’s important information to know and can be useful in deciding how to build it further. You should also check with the different bureaus, since they all calculate scores differently. If you’re keeping track, you can check your scores against personal records and rectify any mistakes quickly.
Even when you establish credit for your business, your personal credit may still be considered in financial decisions, so take the proper precautions to protect your score. Also keep in mind that company credit scores are public information that anyone can access for a fee. Despite the differences, business credit can be extremely useful beyond separating your finances. You may be able to get lower interest rates or monthly payments if you need a loan. As you build the company’s score, you could open up opportunities for lower insurance rates and larger loan amounts.
There are many factors that are considered when calculating the company’s score, so there are many methods you can use to protect it. Even though the score is technically public, you should make sure information about you or your company isn’t being stolen. If your personal credit is damaged, your business dealings may still be affected while you attempt to build credit for your business.
Business credit is determined by many different components, and by making the effort to understand those aspects, the better you can build and protect your company’s score. Doing so can offer you greater benefits for you company than you personally may be able to provide, and can establish you as a professional within the financial industry. With some organizational habits and study of the credit bureaus, you can continue to build your company’s credit with confidence.