Business Credit Score: Why you know yours?
If you’re like many small business owners, you probably don’t know your business credit score. Intuitively, you know your business score matters, but you probably don’t know how much it does.
For example, on May 24th the Small Business Administration (SBA) published an article on its blog “5 Major Reasons to Monitor Your Business Credit Reports” by Marco Carbajo.
To summarize, your business credit score impacts:
- How much money you can get
- The cost of that money (interest rate)
- How fast you have to pay back that money (cash flow hit)
- The amount of insurance that you need to have.
These are some pretty important things to highlight because they can negatively or positively impact your business.
How do you get your business credit score?
There are a couple of business credit agencies. For instance, the most popular is Dun and Bradstreet (D&B). If you use D&B, they will allow you to view your business credit report and update it on-line via iUpdate.
What should you do if you don’t have a file?
When you go to these sites, you may find that you don’t have a file. For all reasons stated above, you probably want one. Therefore, you can start establishing your business credit score.
It’s relatively easy to sign up. But, it can take time. For example, if you use D&B, you will need to register for a DUNS number. This can take up to 30 days. Once you have that number, you can manually update your data.
Why monitor your business credit score?
Mr. Carbajo shares his five key reasons for monitoring your business credit report. Certainly, all are important:
First, ensure your company’s business credit report is complete and accurate. Second, stay notified on any changes to your report that could impact your business. Third, identity any issues or areas in your business credit report that can be improved upon. Next, be aware of who is inquiring about your business (inquiries). Finally, prevent identity theft by monitoring inquiries into your report
What if your file has inaccurate information?
As with your personal credit, it is important to dispute any inaccurate information. For instance, some agencies have alerts you can sign-up for that will send you notifications of any score changes. Thus, it makes monitoring your report much easier. Since the work is on you, the set-up is a bit of a pain. But, it’s worth it. Because once it’s done, monitoring your business credit score is not as burdensome as you may think.
Why go through all this trouble to manage your business credit score?
In other words, you spend a lot of time and effort in managing your business’ reputation. Your credit score is a manifestation of that reputation to creditors. We spend of lot of time and energy managing our reputation to other audiences. So, why wouldn’t we apply that same rigor with our creditors?
In closing, if this is a bit confusing or tricky and you need some help, please feel free to contact us.