Importance of BUSINESS CREDIT
What is Business Credit and it's Importance?
10 Statistics That Explain Why Business Credit is Important for Small Business
What is Business Credit and it's Importance?
Business credit is an important part of growing your company. Theres many benefits of to have built up a positive business credit rating.
A good business credit score enable you to protect your personal credit, easily acquire financing through loans and credit cards. Many banks, investors, and companies rely on your business creditworthine
Business credit is an important part of growing your company. Theres many benefits of to have built up a positive business credit rating.
A good business credit score enable you to protect your personal credit, easily acquire financing through loans and credit cards. Many banks, investors, and companies rely on your business creditworthiness.
Because anyone can view your business credit score—it’s not confidential—it’s important to establish business credit from the start!
As a business owner, separating personal credit and business credit is must. Rather than being linked to your name and Social Security number, business credit is linked to your business entity and separate Tax ID number. This limits your personal liability while running a company—in the event your business went under, your personal credit would be protected.
How is Business Credit Calculated?
10 Statistics That Explain Why Business Credit is Important for Small Business
What is Business Credit and it's Importance?
Top 3 major business credit bureaus include Dun & Bradstreet, Experian, and Equifax. Each agency uses slightly different indicators and methods to calculate a score.
- Dun & Bradstreet uses PAYDEX, a score ranging from 1 to 100 based on the payment history information Dun & Bradstreet has on file. The higher the score, the better your paymen
Top 3 major business credit bureaus include Dun & Bradstreet, Experian, and Equifax. Each agency uses slightly different indicators and methods to calculate a score.
- Dun & Bradstreet uses PAYDEX, a score ranging from 1 to 100 based on the payment history information Dun & Bradstreet has on file. The higher the score, the better your payment performance is.
- The Equifax business credit score compiles three different factors to determine the risk level of your business: a payment index, which is reflective of making on-time payments, a credit risk, which considers the likelihood of your business becoming severely delinquent, and a business failure score, the likelihood of your business closing.
- Experian uses Intelliscore Plus, a statistically based credit score with a 1 to 100 rage that takes multiple factors into account such as years in business, payment history, and new lines of credit opened.
Small businesses should also be aware of FICO’s Small Business Scoring Service (SBSS), which ranks businesses on the likelihood of making on-time payments. SBSS scores are used for term loans, lines of credit, and commercial loans up to $350,000 from the SBA. Scores range from 0 to 300, the higher the score the better. To pass the SBA’s pre-screen process you need a minimum score of 140.