Four Factors Impacting Business Credit Reports

Three of the largest and most widely known business credit agencies in the US are Experion, Equifax, and DNB. A business credit report agency is able to prepare a high level analysis of how well a company will be able to pay its bills, and this is available after seeing scores from the credit agencies. 

Different business aspects can be combined into a single report and this is very important for every business in the US.

Parts of a Business Credit Report

The following information is provided by every leading business credit report agency:

1. Risk Dashboard - It consists of repayment risk, credit limit recommendations, derogatory legal filings, and fraud alerts to show the level of risk in the business
2. Identity of Business - This is established through information such as an address, name, tax ID#, website, DBA’s, and more
3. Description of Business - It shows the history of a business, its date of incorporation, stock exchange information, number of employees, and other data. It may also indicate company size under the same heading.
4. Summary of Legal Filings and Payments - It shows creditor balances, bankruptcies, liens, days beyond terms, and other information on the same lines

The tasks that need to be done by business credit report agencies are very different from those with respect to personal credit scores. These are highly specialized tasks and require elaborate experience.

How Are Business Credit Scores Helpful?

These scores are helpful for a business that can use reports of other potential clients to know their financial positions. It helps understand the risk appetite of a new client and know how beneficial long-term business here will be. 

Businesses can avoid working with other clients who have payment default histories. Future risk can also be averted through score summaries.

Most businesses require loans either for setting up or expansion. Interest rates on business loans as well as the terms of repayment are assessed on the basis of business credit scores. 

Therefore, companies can make future plans on the basis of these accurate reports and summaries. The best agencies do not just provide services but also educate B2B customers about maintaining good business credit scores.

Top Factors Which Have an Impact on Business Credit

Any entrepreneur who wants to establish a company without giving away equity would require funding. To keep the business vision in check, 100% ownership is often necessary. 

A solid credit score will always make lenders more comfortable with the entrepreneur’s financial behavior in the present and future. Here are the most important factors that impact business credit and have the potential to make or break a company:

1. Accounts and Financials - Every entrepreneur must employ professional bookkeepers for accurate financial records. Lenders will want to see important documents such as YTD P&L statements, YTD balance sheets, and sometimes YTD cash flow statements as well. Without proper records, entrepreneurs can forget about getting the funding they need.

2. UCC Filings - This is one topic about which every entrepreneur should ask the lender. UCC or Universal Commercial Code is a legal notice that a lender files with the Secretary of State for security interest against one of the entrepreneur’s assets. A blanket UCC filing will ensure that should the entrepreneur default, the lender will get access to all the involved assets. This also means that risk in such a business is higher than normal.

3. Business Structure - It is very important to register a business with the Secretary of State whether it is or will be operating soon. If the business has not been incorporated, it means that money for a service or product is being collected under an individual name or registration for sole proprietorship has been done. Lenders will generally not be comfortable giving loans to sole proprietors. 

4. Importance of Payment History - There is no doubt that payment history does affect a personal credit score, but it may also impact the score calculated from a business credit profile. All invoices must be paid early to build this score. Entrepreneurs would also be benefited if they assign contracts with vendors reporting to D&B and Experion.

Although the above are critical factors for business credit, there are others as well. It is important for a proprietor to know about this as the journey to entrepreneurship is begun. Ideas are invariably good, but these will not see the light of day unless they are funded properly.

How to Rectify an Existing Default?

All is not lost after an entrepreneur default on a business-related EMI. Taking a short-term loan too may appear counter-productive, but it is actually useful. 

Paying the new loan on time shows the credit bureau that the entrepreneur is fully capable of clearing debts and handling credit responsibly. 

Therefore, a business credit score that may have fallen back can get the much needed boost to recover. However, all older loans must have been fully paid off to implement this tip.

What are the Steps to Maintain a Good Credit Score?

Consumer credit scores are difficult to comprehend, but if you own or want to own a company, you'll need to take in even more detail. Much like companies receive a credit rating dependent on their individual creditworthiness, they also have a credit rating to show their overall credit health. 

credit scores are used in the same way as personal credit scores are. So, for example, if you apply for a business credit card or choose to deal with a credit-extending vendor, your Creditsafe business credit report will be used to assess your creditworthiness, as well as your interest rate and loan terms.

Like personal loan ratings, higher business loan scores are often better to achieve the best business loan rates and conditions.

How to verify the credit value of your business

You should know if you are wondering how you can verify your business credit that many third-party companies allow you to access an online business credit report. 

Every provider can view a version of Creditsafe business credit report, and some provide many packages that allow you to access more credit functions and details.

Maintaining a good business credit score in 6 easy steps.

#1: pay your bills on time if you own a company.

To improve your personal credit score, you must pay your loan EMIs and credit card bills on time. The same can be said for a company's credit score. 

Late payments hurt your credit score, making it difficult to get a business loan, line of credit, or credit card.




Paying your bills on time is one of the most effective ways to increase your credit score. Defaults, late EMI fees, and bounced checks all lower your credit score. 

Paying your bills on time not only boosts your credit score but also lets you keep good relationships with suppliers and other creditors.

#2: attempt to keep your credit card balances as low as possible.

A strict rule of thumb is to keep the company's credit utilization ratio under 30%. For example, let's say you have an Rs. 10 lakh overdraft from your deposit. Ideally, you should not use more than 30% of your usable credit (Rs. 3 lakhs). 

For example, if you drew Rs. 3 lakhs from your available OD cap, it's a good idea to repay the sum borrowed before making any more withdrawals.

When your credit utilization ratio exceeds 30%, your credit score begins to decline. However, even if you have to withdraw a greater sum, your credit score will improve if you repay the loan on time.

#3: maintain a low level of business debt.

Liabilities on your credit report include credit card balances, term loans, and other credit lines. The more loans you take out, the worse your company credit score will be. 

Lenders are hesitant to give loans to companies that have a lot of unpaid debt. So try to repay older loans as soon as possible to boost your credit score.

#4: take time for short-term EMI loan & repay.

This might seem to be counterintuitive but bear with us. Taking out a short-term business loan and repaying it on time shows the credit bureau that you can responsibly manage credit. 

This will help you improve a bad credit score. However, before implementing this tip, make sure you repay older loans.

#5: do not cancel old cards.

In deciding your loan score, your credit history plays a key role. An older credit card/other credit account is continuity and represents the confidentiality of your company suppliers and sellers.

The older a loan account, the higher its effect on your loan value. If an old credit card is canceled, the corresponding credit record is erased. Therefore, when determining the credit score, this background cannot be used.

It's always advisable to close the new credit cards if you have more than one company and want to cancel a few to minimize their effect on your credit score.

#6: periodically check your credit report and report for any errors

You have to correct this surveillance if you are one of the thousands of company owners who don't routinely track their companies' credit rates. 

At Creditsafe, you can check your business credit score. Provide some simple business information, and in a few minutes, you can obtain your new credit value and credit report.

You should check your business credit report regularly as a business owner. Check for errors or inaccuracies. Even a minor error like a wrong mobile number in the credit report will affect your company's ranking. If you find any errors/inaccuracies in your credit report, report it and correct it as soon as possible to the credit office.

Finally, maintain intact your credit value.

If you have a new company or a proven company, most lenders often examine your personal credit before granting loans. Make it easier to handle the company's cash flow and keep your business and personal finance apart. Get your company credit card and not use it for household/personal expenses to pay your regular costs.

Keeping a decent Creditsafe business credit report increases the chances of achieving the best possible price for business finance.

How to Get a Credit Report for Business: Things to Know

To get the money you need to run and grow your business successfully, a good business credit report and score are essential factors to consider. 

A good corporate loan value can save you money at lower interest rates, provide a business loan without a personal guarantee, and improve your company's overall image. Do you know how to pull a credit report for a business as it plays a vital role in managing your credit risk?

Businesses can be granted credit scores, just like individuals. These numbers continue to determine the creditworthiness of a company, i.e. its ability to pay back loans. 

Having a good credit score can help your business qualify for a great credit card, loan, or term financing for business, all of which can help improve your cash flow and accelerate growth. 1 of the 4 major reporting agencies - Dun & Bradstreet, Experian, Equifax, and FICO - predominantly issues small business credit scores. 

This guide will help you understand what variables drive each of the various business credit scores and how you can improve your company's standing.

What is credit for business?

Business credit is just a way of measuring how accountable your business is when managing its finances so everyone must know how to pull credit report for business.

This is analogous to personal credit. The difference is that only financial activity related to running your business is looked at by business credit.




Regularly checking your business credit reports can help you set up your business to obtain financing when needed, and to manage and grow your business better over the long term.

Business Credit Scores Explained

Each of the various business credit reporting agencies has a different scale and score-enhancing methodology. All of these various credit scores depend heavily on a company's payment history with its previous suppliers, creditors, and lenders. Having records of timely payments, as a rule of thumb, will help establish a good score.

The primary objective of these scores is to have a measure of the financial stability of your business. That is why good balance sheets, stable and organized, tend to correspond with high scores. 

On top of that, things like your company's size and age, or its credit history, may also play a crucial role. If you are set to improve your companies' credit score, you should first ensure that you get these fundamentals down. 

In order to fine-tune and optimize your credit score, based on the various factors each of them considers, you can then look at the individual reporting agencies.

Why you should check your business credit reports

In comparison to personal credit reports, to help determine how risky it is to work with you, anyone can buy a copy of your company credit report. To keep an eye on the details, lenders and service providers see when they buy your information, it is a good idea to review your business credit reports periodically.

A lender may want to check whether your company has a loan repayment history and is on stable financial ground. To ensure that your business is not a risky gamble, a company will obtain your business credit reports, either for lending credit or working together on a project.




A strong history of business credit and favorable business credit can mean the difference in whether your company is accepted for a loan or a vendor gets better terms.

A business credit score is a critical piece of data looked at by banks and lenders when evaluating finance applications. To them, it's a rundown of how you're having trouble handling your debt. 

As such, to define the rates and terms of your loan, they will also use your credit score. Good credit scores would mean that, ultimately, the loan will be less costly, because you pose less financial risk to the lender.

Credit scores are also critical for obtaining customer contracts - before signing any contracts, your customers and suppliers can well review your business credit report as part of their due diligence. 

This ensures that the company is in a stable financial condition and calculates the risk that you will go into liquidation or fail to pay your invoices when doing business.

What are credit ratings for businesses?

Business credit scores are based on business credit report information. Depending on the product you purchase, each of the business credit bureaus will usually provide credit ratings along with the reports they produce.

Knowing about how to pull a credit report for a business gives you the ability to challenge any mistakes that could harm your financial credibility.

When they decide whether to lend to you and help you find ways to develop your business credit, your business credit reports will give you an idea of what borrowers will see.

Keeping track of your business credit will help you ensure that a company of your size and longevity has access to the best interest rates and loan options available. It's an essential way to keep track of how others view you and how you see yourself. 

But when exploring your personal credit, it needs a few more hoops to leap through than what you would experience. That does not make an effort any less important.

Improving Business Credit When Your Credit Isn’t Good

Business credit often ties directly into the owner’s personal credit history, but portions of it also apply specifically to the company itself. For an owner who’s attempting to build up business credit, but has a poor personal financial history, there are some steps worth taking.

Establish a Business Entity

The first step is to establish a business entity by incorporating the company. Then, get an EIN from the Federal Government to take on a new corporate identity. It’s that number you’ll use to establish company credit.

You’ll need to file all the appropriate documentation to file taxes and handle the rest of the regulations in your area. The business has responsibilities but also comes with benefits.

Get a Business Bank Account

Opening a business bank account will help you to establish credit and right standing with the banking industry. You’ll be more easily able to get loans in the business name with one.


A business bank account makes it easy to handle most of the routine financial requirements surrounding the enterprise. Set one up that’s convenient and affordable, and that will help your business meet its objectives.

Master Your Understanding of Credit

If you’re hoping to use business credit to your benefit successfully, you’ll need to know as much about the subject as possible. Otherwise, you may end up choosing poor account options that don’t pay off.

The terms vary significantly for different businesses and depend on your credit as the owner. It’s probably an excellent idea to start rebuilding your credit at the same time you begin to increase on the business end.

Start at the beginning and get the credit risk analysis you need instead of attempting to strategize yourself. Business credit is more sophisticated than it was the past, and it can be a challenging topic for anyone to master.

Obtain Business Credit Cards

Business credit cards will help you establish more credit quickly. They work much like personal ones do, and will require prompt repayment. These are the best way overall to build your credit history because you’ll make timely payments each month that report to the bureaus. As the on-time payments increase, companies become more comfortable lending.

The credit increases only by using it and growing the balance without missing payments. That’s why you need to make sure that the expenses help the business grow, so there’s plenty of money to pay back the loans on time. If you do, you can improve your business to nearly unlimited amounts.

Understanding the Differences Between Personal and Business Credit

Image via CrunchBase

If you’re a business owner and you’re in the market for a business loan, it’s a good idea to understand that there are big differences between business credit and personal credit. 

Personal Credit

Let’s begin with your personal credit. Hopefully you are already aware of the fact that your personal credit score takes into account your credit history. A credit agency most commonly will calculate your score using the FICO method, which is based on several factors such as your payment history, outstanding debt, new credit, and the length of your credit history.

TransUnion, Experian, and Equifax are the top three personal credit bureaus in the US. It is required by law that these three agencies allow you to request a free credit report from each of them every 12 months. Additionally, if you find an error or discrepancy on your report, under the Fair Credit Reporting Act, the credit reporting company and the organization that provided the incorrect information must investigate the error in a timely manner.

It’s important to note that any accurate negative information on your credit report, like missed payments, will eventually disappear after seven to ten years. And although those marks stick around for several years, you always have the opportunity to build and repair your own credit in the meanwhile.

You want to maintain the best credit score possible because it is your passport to low interest rates and fees when you decide to apply for a car loan, take out a mortgage, request a credit card, and more. If you have a favorable credit history, companies will be more inclined to offer you good benefits and trust that you will make payments on time.

Business Credit

With that being said, if you’re looking to take out a loan for your business, it’s best to do it under your business’s credit. Regardless of how stable your business may be right now, business endeavors can be risky, so you don’t want any of your business’s potential debt or missed payments to reflect on your own personal credit report.

So that’s where business credit comes into play. If you don’t currently have business credit, you’ll want to first form a business entity, apply for a tax number, and then set up a business bank account. Once you’ve done that, you can register with business credit bureaus, so that vendors can begin reporting your business’s payment history to them. The top three business credit bureaus include Dun & Bradstreet, Business Experian, and Business Equifax.

These credit bureaus calculate your business’s Paydex Score, which is similar to the FICO scoring method. The Paydex score takes into various factors, but relies heavily on your business’s payment history.

One of the main differences between your business and personal credit, is that there is no way to repair your business’s credit report. Just a few missed payments, and your business credit could be tarnished forever.

Another big difference is that there are no rules or regulations in place that require the credit bureaus to fix errors on your business’s credit. While you can still report mistakes or dispute errors, there aren’t any laws in place to facilitate the process or protect your business like there are with personal credit.

Understanding some of these main differences between personal and business credit will make you more savvy when it comes time to take out a loan for your business.

Chloe Mulliner writes and edits for CreditSources.org, a website that focuses on bad credit unsecured loans, cash advances, and all things credit related.