Business credit report and scores are not always reliable or even available, especially if you are launching your own business or an independent contractor working on a freelance basis. What’s more, if you have one, the details might not be accurate or complete – even if you pay your bills on time and in full each month!
A business credit score may be an important factor in starting and growing your business. It’s based on your financial history and other factors that affect whether you pay bills on time and what interest rates you get. Paying bills late can hurt your score, but so can being overextended: too much debt can signal that you’re risky to lend to.
A late payment or default will show up on your report for seven years from when it first appears. Late payments are noted by consumer reporting agencies as either paid-late or paid-as agreed, while defaults may be noted as charged-off.
What is a Business Credit Score?
A business credit score is one of many ways banks, lenders and other companies judge your company’s ability to repay debt. The three main credit bureaus all produce business credit reports, which probably won’t show up on personal credit reports.
You can obtain a free copy of your business credit report at CreditQ; with these reports, you can see what data each company uses to evaluate your company’s financial strength and track any late payments that have been recorded against you or your employees. Late payment issues are particularly problematic when securing new financing since they indicate you may not be able to meet existing obligations.
However, options are available for late payment resolution, including automated tools like Late Payment Solution, which connects small businesses directly with decision-makers in more than 100 lending institutions. If you have late payments on your record and want them removed from your business credit report before applying for new financing, an online tool could help make it happen quickly and easily.
When Can You Use it?
Knowing your business credit score and your business credit report will help you leverage them to negotiate better terms with suppliers, understand why certain suppliers are wary of doing business with you, and ensure that nothing will get in your way of getting off to a fast start.
Many small businesses face difficulties securing funding or partnerships because their financial records are not up-to-date. Nowadays, online startups can use bank loans and government grants, so finding out how useful it is to have an idea about having a clear picture of their business financial conditions shouldn’t be put off any longer.
Your business credit score will often determine what kind of credit line you get from banks if any at all.
A business model report is an extremely valuable tool. It can help startups focus on key issues and better organize their thoughts. If you’re interested in developing one, you’ll want to read through books like The Business Model Toolkit by Alex Osterwalder and Yves Pigneur or consult experts like CreditQ, who can help get your model right.