Your Business Credit Report: Making Sense of the Numbers
In case you didn’t already know, your business credit report isn’t just a meaningless jumble of numbers and figures. In fact, these scores are among some of the biggest deciding factors on how you’re able to conduct business in the coming years, and impact if you’re able to get the loans you need to keep moving forward and building your company and even which businesses will work with you regarding sales and supplies. Therefore, it’s crucial to understand how these numbers are formed and what they mean if you really want to build a business that’s a household name in the coming years.
Unlike your personal credit score, which ranges from 300 to 850, your business credit report will only show scores between 0 and 100 because this is how the scores are calculated for businesses. Some companies may offer supplementary scores to assess your credit risk as well, but overall, a score of 100 means you’ve been doing something right, and that your credit is excellent. You should, of course, strive for these upper numbers.
Keep in mind that generally, your business credit report is only going to include business data, meaning you don’t need to worry about it pulling information from your personal scores and bank accounts. However, this may not extend to the application of business credit cards, which do happen to take personal information into account.
Your score is the result of several different details run through an algorithm. The most common issues which are taken into consideration when building your score are any missed payments you may have had, your current debt, the amount of your credit you’ve used thus far, the age of your oldest account and much more. Each of these details work together to show lenders and other businesses how reliable you are when it comes to taking care of your cash and responsibilities, and reveals whether or not you’re worthy of further responsibility and trust in the coming months.
What You Should Keep in Mind
Different companies may take slightly different information into account and formulate your score in different ways. Therefore, viewing a variety of scores to ensure you’re getting a high number on each of them is always a good idea.
If you’ve been dealing with a low score, looking at the above factors and identifying the issue is the key to fixing the problem and building your credit to make it stronger in the future. It’s never too late to improve your credit, and with the right knowledge of your business credit report, good standing is never out of reach.