If you plan to borrow money for your small business, it’s important to establish and maintain a good business credit report. Like the credit reporting agencies for consumers, business credit bureaus maintain data such as the name of the lender, how long you have had the account, your payment history on each account, and who has requested to see your file. Both types of credit reports can change frequently due to incoming data, which is why we recommend that you monitor them regularly.
The Impact of Data Contained in Your Business Credit Report
The information maintained by business credit reporting agencies tells potential lenders how well your company manages financial obligations with suppliers, vendors, and other lenders. It is critical to ensure that your business credit report contains accurate information since it impacts these types of decisions:
- Whether a lender approves or denies your company for credit
- The rate of interest you pay on outstanding loans
- Whether you receive favorable repayment terms
- How much you pay for insurance premiums
Business credit reports typically contain a score ranging from zero to 100. Most lenders consider a score of 75 or higher an excellent rating.
Reasons to Regularly Monitor Your Business Credit Report
Part of achieving a good credit score is monitoring your credit file to ensure accuracy. If you find an error, be sure to notify the reporting agency as soon as possible. By law, credit reporting agencies have 30 days to correct the error or respond in writing why the information is correct. Here are other good reasons to monitor your business credit report:
- You will know about changes to your report that could impact borrowing decisions sooner.
- It is the best way to stay ahead of potential identity theft.
- You learn who is requesting your business credit information and can follow up to find out the reason.
- It allows you to see potential areas of concern that you can improve.
Do you need more information about business credit files or alternative lending sources? Please contact Infinity Lending Solutions today for help.