Credit Scores Can Make or Break Your Business Recently, there has been a huge increase in the focus on credit scores for consumers. The Internet and news are exploding with information on how to improve, build and maintain good personal credit scores. In the past cash was king, but these days, it’s almost impossible for someone to go a day without using a credit card. With the important role credit cards play in Americans’ daily lives, it should come as no surprise that they are becoming aware of their personal credit scores too. However, despite consumers’ awareness of personal credit, surprisingly many don’t even know about business credit and the benefits it can deliver. Business credit scores are just as important to companies as personal credit scores are to individuals. Just like with personal credit scores, there are three major business credit bureaus: Experian, Dun & Bradstreet and Equifax. These bureaus each have credit scores that represent a company’s payment experience and financial health. But unlike personal credit, regulations are minimal for business credit, and there is a lot less buzz about getting a good score. Don’t let the lack of buzz fool you into thinking business credit doesn’t matter. Unlike with personal credit, anyone can view a company’s business credit without its permission as long as they are willing to pay a fee to buy it. Sadly, many companies aren’t aware that their scores are being scrutinized because they are never notified. They could lose out on a partnership or new account to a competitor and be completely unaware that poor or limited credit was the reason. Besides losing potential accounts, companies may be charged more in fees and interest on financing, or even be denied. In addition, business owners may have to sign personally and hinder their personal financing needs due to commingling personal and business credit. Unfortunately, even a business that has been around for 10 to 20 years may have limited credit because not every vendor, lender or leasing equipment company updates information to any or all of the credit bureaus. This means a decision maker viewing a company’s credit may not see a score that represents the company’s true payment history and financial strength. If you do business with government agencies or Fortune 500 companies, you can be sure that the majority will view your business credit. Without the right credit ratings, a business can suffer because it will not be able to acquire the right products and services it needs to flourish. On the other hand, having healthy ratings can equal greater savings and opportunities. |