Understanding your business credit reports

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In a Nutshell

If you’re a small business owner or sole proprietor, understanding your business credit reports can be a key first step toward getting loans and other financing for your business.
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Checking your business credit reports on a regular basis can help you set your business up to get financing when needed, and better manage and grow your business for the long term.

Just like an individual credit report assesses your credit as a consumer, a business credit report shows where your business credit stands.

Staying on top of information in your business credit reports is cr­ucial to growing your business, since a good credit rating can mean a better chance of qualifying for a loan or access to good financing terms. You may also find mistakes and inaccuracies that could keep you from getting loans or credit accounts with vendors.

Here’s what you should know.

Why you should check your business credit reports

Unlike with personal credit reports, anyone can buy a copy of your business credit report to help decided whether to work with you. It’s a good idea to check your business credit reports regularly to keep an eye on the information lenders and service providers see when they purchase your report.

A lender may want to check whether your business has a history of loan repayment and is on solid financial ground. A business may get your business credit reports to make sure your company is a solid bet for lending credit or for working together on a project.

Knowing what’s on your business credit reports also gives you the chance to dispute any errors that could ding your financial reputation.

How to pull your small business credit report

While there’s a federal program requiring each of the three major consumer credit bureaus to give you one free credit report annually (and Credit Karma lets you check reports from two of those bureaus as often as you like for free), there’s no such law for business credit reports.

You can buy a copy of your small business credit report through each of the major bureaus that offer business reports:

You can also get free access to a summary of your business credit reports from Experian and Dun & Bradstreet when you sign up for an account with Nav, a credit monitoring company geared toward small businesses.

If these major bureaus don’t have credit reports for your business, you may not have established your business credit yet. Check out our guide on building and managing your small business credit if that sounds like you.

What’s on a small business credit report?

Your business credit profile and credit scores are based largely on information that banks and companies you trade with send to credit bureaus that generate business credit reports.

A business credit report collects information on your business, such as general company information, business size and industry risk. It also includes information directly related to your business credit, including:

  • Payment history
  • Account details, usually including when you opened each account
  • Public records such as liens, judgments and bankruptcies
  • Outstanding debts
  • Company information including number of employees, sales, ownership, and subsidiaries

Many of those factors are the same ones used to determine your individual credit reports. And, just as with your personal credit reports, you may find different information on reports from different bureaus.

But there are also important differences between a personal and a business credit report.

For one thing, personal credit scores can range from 250 to 900, depending on the credit scoring model (you’ll often see a range of 300 to 850 for general consumer scoring models, like FICO® Score 8 or VantageScore 3.0).

But business credit scores use different ranges, such as Dun & Bradstreet’s PAYDEX® score of 1 to 100.

Also, while your Social Security number identifies you on a personal credit report, a business report uses your business employer identification number, which you can apply for online from the IRS, to collect information.

Bottom line

Your business credit reports can give you an idea of what creditors will see when they’re deciding whether to lend to you and help you find ways to build your business credit.

Knowing what’s on your small business credit reports is just one crucial part of operating your business.

About the author: Deb Hipp is a freelance writer with a bachelor’s degree in English and creative writing from the University of Missouri-Kansas City. When she’s not writing about personal finance and news, she enjoys traveling to seas… Read more.