How to Analyze Your Business Credit Report

A strong business credit report can help build your business. Having a good credit score can increase your borrowing power and keeping track of what is on your business credit report can help you avoid fraud and fix errors.

What Is a Business Credit Report?

A business credit report is a document packed with information about the structure, industry, owner(s), and financial performance about your company. A business credit score is a numerical assessment of your business’s creditworthiness and how your company has handled money.

Lenders, suppliers, customers, and other businesses can check your business credit report and use the information on it to make decisions about whether to do business with or lend to your company. Experian Business, Equifax Business, and Dun & Bradstreet are the three main business credit bureaus. they gather information, create business credit reports, and use scores to assess a company’s risk profile.

How to Analyze Your Business Credit Report

Do not miss these steps when you check your business credit report.

  • Verify your company information. Make sure that your NAICS and SIC numbers are correct and up to date.
  • Check your score.
  • Check your account information, payment history, and public records.
  • Focus on problem areas. Work on building a strong business credit by making payments early or on time, borrowing from lenders that report payments, and keeping your personal and business credit separate.
  • Dispute errors or report fraud. You can dispute errors and report fraud with Experian, Equifax, and Dun & Bradstreet. It is important that you remove these from your report as soon as possible.

How Your Business Credit Score is Calculated

The following factors are used to calculate business credit score:

  • Credit utilization ratio
  • Payment history
  • Age of credit history
  • Existing debt
  • Public records
  • Company size
  • Industry risk
  • Number of recent credit inquiries

A credit score is not the only factor that is considered by lenders, but it is important. A strong credit history can help you secure more loans or arrange more favorable payment terms and rates. It might be the tool you need to establish a relationship with your partner or new supplier.

Unless you are at 750 or higher, your credit score probably has room for improvement. While there is no way to improve your credit score overnight, it is not that difficult to do over a period of time. As long as you pay your bills on time, pay down your debts aggressively, and avoid opening new lines of credit, you should be on track toward improving your score as well as your overall financial future.