Business Credit Score

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Business Credit Score

One of the most overlooked ways to help your business is to maintain a high small business credit score. This is essential in order to be able to borrow the money you need, get a lower interest rate credit card and even to be able to pay on credit. Other business owners, including suppliers, may pull your credit score before offering payment terms.

Keeping a small business credit score above 75 is not as difficult as you may imagine. Working with a company that helps you to boost your credit score is a great idea. These professionals understand how making some simple changes in the way you do business can really have a big impact on your score.

There are also easy things that you can do as a business as well. It is important to do these things on a regular basis. In just a few months even a startup business can have an excellent score and no difficulty in obtaining credit as needed.

PAY BILLS IN ADVANCE

Many vendors allow businesses to pay off invoices over a specific period of time. This is usually 30 days and it helps to prevent dramatic drops in cash flow at specific times of the month. You can avoid making big bill payments on weeks you are also doing payroll or the rent or mortgage is due.

Paying these net 30 invoices off in advance, even just a few days in advance, can help your score. The business also sees that you are a good borrower and will increase the amount of credit they will offer. This in turn is reported to the credit bureaus, all working in your best interest.

KEEP IN TOUCH

Sometimes the cash that you are expecting doesn't come into your account on time. A person you sell to may be late in their payment, which will affect your ability to pay your creditors. Having a small business line of credit can prevent this problem and help to support your credit score.

You may also be able to talk directly to the vendor you owe. If you explain the situation they may be willing to extend the deadline and not report a late payment to the credit reporting agencies. Of course this is made easier if you have a history with the creditor of complete early payments.

WHAT INFORMATION IS REPORTED TO THE CREDIT BUREAUS?

To Equifax Commercial we report your account number, business address, EIN number, the type of account that was established, the current trade line value and the amount of month you've spent within that specific month's term as well as the payment experience for example, prompt, slow, etc.

THIS IS AN EXAMPLE ONLY

1234-1234-0/
Trade
01/01/2017
06/20/2017
NET 30 $1,000
$1,000
$1000*
Current $0 $0 $0 $0 $0 $0

To Dun and Bradstreet we report your account number, business address, EIN number, type of account that was established, the amount of money you've spent within that specific month's term, the payment experience for example, prompt, slow, etc.

THIS IS AN EXAMPLE ONLY

Mfg computer terminal | 1 | $100 | $100 | 100% | 0 | 0 | 0 | 0 |

WHY IS THE DOLLAR AMOUNT REPORTED DIFFERENTLY THAN WHAT I ACTUALLY SPENT?

Each credit bureau has a formula and a specific way that they round the dollar value for each transaction. They control this output. We report the very next dollar amount, for example, if you spent $189.99 we round that up to $190.00.

We report your purchases to Equifax Commercial and Dun and Bradstreet every month. Click on Register to get started building your business credit today.

MISTAKES TO AVOID

The biggest mistake that a small business can make in developing their credit file and credit score is to miss a payment due date. It is essential to pay everything on time or in advance. Do not allow payments to slip into the grace period or beyond.

Even a small amount of money that is paid late will have a negative impact. This happens because you don't have a solid credit history to offset the oversight. The fewer monthly payments you are making the more important this is. When you have credit one late payment won't have such as negative effect. However, it is still important to pay all bills on time to avoid drops in your credit score.

The other mistake is to avoid making partial payments. Always make the full minimum payment or prior to the due date. Partial payments are considered late payments and will negatively impact your credit score.

Building business credit is challenging when you are starting up. Keep it reasonable and within your budget. Make regular purchases and payments with other businesses to get started on developing a solid credit history.

WHAT ARE THE SCORES?

Credit scores are a numerical value that is determined based on a formula. Each company may use a slightly different formula but most companies in the United States report using very similar methods. The different scores often occur because not all information is reported to all the agencies.

The credit score values can range from a low of zero to a high of one hundred. Any business with a score of less than 75 is considered a high risk for an investor or a lender. A score of 75 or better means the company is a good credit risk.

MONITOR YOUR SCORE

Information about your business may be reported to the credit bureau in error. If you monitor your score on a regular basis you can immediately catch any negative reports to make sure they are accurate. If there are any mistakes you can correct them before they cause problems.

A small business credit score is really your introduction to other businesses and lenders. Paying attention to your score and working to keep you credit score and rating high is an important aspect of being successful in the business world. Experience the powerful benefits of being our client. Register today and begin the process of building solid business credit.

WHAT A HIGH CREDIT SCORE ALLOWS

The higher your business credit score the more secure of a business you are. The more secure you are the lower the risk to a lender, investor or other business. When you have a high score you can take advantage of lower interest rates on loans. You will also be able to qualify for more money through business loans.

Even if you don't want to borrow money or take out a loan, large purchases can be impacted by a high credit score. Other businesses are more likely to require less of a deposit or allow a longer pay out time if you have a high credit score. This is because you are less of a risk for a default on the remaining payments.

In addition if you want to expand and think of attracting investors, they will want to see your score. A high score shows them that your business is able to keep current with all expenses, which is an important part of being a successful investment.

A high business credit score can also help to lower your insurance premiums on your business. This can be a major cost saving factor over time.

Get started now with Strategic Network Solutions, LLC, we invite you to open an account today, Register and then make a purchase to begin building solid business credit.