Like personal credit, businesses establish credit profiles, histories, and scores over time. A business credit score is as important as an individual’s credit information, given that companies need to be able to show outside investors and potential lenders they have a track record of paying their bills on time and in full.
When business credit is tarnished, it’s an uphill battle to receive affordable financing, whether through a business credit card, a loan, or another funding source. Acquiring strong business credit begins with understanding how a company can access its financial history once credit is established with one or more creditors. The process resembles that of obtaining a personal credit report, but there are differences that businesses should be aware.
Business Credit Reporting Agencies
The three main credit reporting agencies that manage business information are Dun & Bradstreet, Experian, and Equifax. Each agency collects millions of data points on businesses throughout the United States and other countries, providing a robust set of information from which they can calculate a business credit score.
To obtain a credit report for a particular business, go to the Dun & Bradstreet, Experian, and Equifax business credit websites and search by the company’s tax ID number, company name, and address. Unlike individual consumer credit reports, federal law does not require credit reporting agencies to make this information available for free. Instead, each agency charges a fee for pulling business credit information, regardless of whether it’s your business or someone else’s.
Only businesses with an established credit history and score will come up in a business credit agency search, and each credit reporting agency has a slightly different method for gathering and interpreting business financial information.
Sample reports are available on each site, making it a little easier to understand what you will see once a credit report is purchased. Once you have determined which credit reporting agency you will use to view a company’s data, you pay the fee and view the report.
Free Access to Your Business and Personal Credit Scores
In addition to finding business credit reporting information directly through the three major business credit agencies, businesses can access their credit reports and scores through Nav.com. This resource offers a simplified view of business credit reporting, making it easy to navigate through the data included in a company’s credit profile.
Nav also offers features that help businesses understand how credit can be improved over time, with specific recommendations for companies based on their credit history, including credit cards, loans, and other financial products. Initial access to the site, some of its features, and the business credit score and report data are offered at no cost, including your Experian consumer credit score and report summary, Experian business credit grade and report summary, and D&B credit grade and summary. Plus, Nav provides free credit monitoring alerts for businesses and individuals.
The Importance of Business Credit
Establishing and maintaining strong business credit is necessary for nearly all companies across every industry because the need for funding is often just around the corner. Finding the dollars for business expansion, a new marketing campaign, hiring additional employees, or purchasing inventory or equipment are common goals of an organization that require some degree of outside financial assistance.
A well-established history of paying bills on time, borrowing within the business’s means, and having assets on hand to cover debt payments comes together to create a business credit score that works in a company’s favor when the need for financing arises.