While most business owners are familiar with their personal credit score and its importance, they might not be as familiar with their business credit report and how it can be used to review and evaluate their business.
We’ve rounded up the answers to the most common business credit report questions and outlined resources you can use for checking, building, and monitoring your business credit.
What is a business credit report?
Your business (also known as commercial) credit report details information about your business that is collected and reported by a credit bureau. The information typically includes details on your business’ payment and credit history, including payment or performance issues such as collections, judgments, and tax liens. A business credit report also contains non-credit details about your business, including owner or principal names, registered agents, address, and information from your secretary of state.
Based on the information in the report, your business will be evaluated and scored to evaluate potential risks, including the likelihood of defaulting on your obligations.
How can I get a copy?
You can access your business credit report through a credit agency (more on that below). You will need your business name or your DBA (Doing Business As) name. Unlike personal credit reports, business credit reports are not free. You can pay for one-time access or for a subscription.
There are three major bureaus that issue business credit reports. Each is a little different in their approach:
Experian offers both one-time reports and subscription services for closer monitoring. They offer a helpful side-by-side comparison of their products and features here. They also have a handy tool for planning how changes in your business could impact your score.
Dun & Bradstreet uses a unique identifier called a D-U-N-S Number to monitor a business’ credit. You can get your free number here. Tip: It can take 30 days to get your number but you can have it expedited for a fee. Once registered, you can update your company information directly with Dun & Bradstreet. Have more questions? Here’s a good overview.
Equifax offers several different types of reports including: an in-depth business credit report, an at-a-glance business risk assessment, as well as a business risk monitoring report to keep you updated on new or changing credit information. You can get started by searching for your company here and then Equifax will let you know the reports that are available and options for one-time reports vs. subscriptions.
How is a business credit report different than your personal credit report?
The first thing you’ll notice about a business credit report is that the scores are calculated on different scales than a personal credit score. With personal credit, there’s a standard used across bureaus (FICO), but with business credit there is no standardization. You can get an explanation of business credit scoring here.
As mentioned above, you’ll also find that you have to pay to access your business credit report. Unlike your personal credit reports, your permission is not needed for a third party to access your business credit report. Vendors, partners, and other businesses will often pull a report to get a complete picture of your business. And unlike personal credit bureau reports, pulling your report multiple times does not impact your business credit scores.
How is your business credit report like your personal credit report?
You should look at your business credit report on a regular basis so that you can monitor any changes. And like personal credit reports, there can be misinformation or mistakes in your business credit report that you’ll need to address directly with the report issuer. Like a personal credit report, a business credit report is often one of many considerations a creditor or potential partner might use to evaluate your business to assess potential business risk.
What does a report look like?
What information is provided by business credit bureaus?
View a breakdown of the different sections on a business credit report here.
How do you build your business credit?
Click here to view tips for raising your business credit score.
How can you use business credit reports to evaluate risk in your own business?
Check out four unexpected tips on using business credit reports to run your business here.
How do you correct a mistake on your report?
Experian: How to submit corrections
Dun & Bradstreet: Manage your own info
Equifax: How to dispute wrong report info
Understanding your business credit score is a key piece to growing your business and separating your business credit from your personal credit. By understanding and monitoring your business credit reports, you can use them to your advantage.
Our mission at Swift Capital is to unleash the potential of every small business by providing them with fair and convenient access to working capital. We harness data and technology alongside personalized human expertise to see the true potential in every business. Did you like this post? Tell us what you’d like to see on our blog. Email us at [email protected] or tell us here.