Does Your Company Have a Healthy Business Credit Score?

As an entrepreneur, you might rarely think about your company’s business credit rating, but it may be important to take steps to help ensure that your score remains strong. If you are evaluating your current standing and hoping to improve your credit in the future, there are a few basic strategies that may boost your chances of qualifying for larger loans, getting lower rates on insurance policies and more.

Understanding Credit Scores

Before you attempt to do anything to change your company’s credit rating, you first need to understand the situation. What is a credit score? Why does it matter so much? A credit score helps prospective lenders understand your business’s financial history and trustworthiness. Before granting significant loans, lenders generally want to feel as confident as possible that they will receive timely payments. Credit ratings assist financial institutions in choosing which companies are creditworthy.

Scores and ratings are generally calculated through algorithms that evaluate financial histories, transactions and more. There are multiple major companies that compile credit scores and issue reports. Each company might have a slightly different method for calculating credit scores, potentially incorporating relevant information from sources such as legal filings and public records.

Checking Your Information

If you want to know the current state of your company’s business credit, you may want to request a report from one of the three major credit services. Depending on your situation and needs, you can first research each company to determine which report is likely to be most relevant. Alternately, you could order a report from each of the companies to get a more complete picture of your credit situation.

Protecting Your Credit

Even if your current credit is not quite as stellar as you would like, there are some steps you may be able to take to improve it. As much as possible, try to make wise financial decisions. These decisions could involve things such as staying well under your credit limits on company credit cards, making all payments on time, and more.

Confidentiality is another facet of protecting your company’s credit rating. If you are concerned that your business’s information might have been exposed during a credit breach, try to make sure you find out whether your company was likely to have been affected. If it was, take steps to mitigate the risk as much as possible.

Maintaining excellent business credit should help you grow your company over the long run. Once you understand how this credit works, consider checking your current scores, then taking steps to improve your rating in the future.


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