Understanding Commercial Credit Reports

As an individual, you understand the importance of a high credit score when it comes to making a large purchase, like a home or a car. In the same way, commercial credit is important when starting out on a new business venture or partnership.

Based on a 100-point scale, a commercial credit score measures the creditworthiness of a business. Dun & Bradstreet, Equifax, and Experian are the major business credit bureaus, and they verify business data in different ways. Unlike personal credit, business credit reporting is not standardized. However, they typically evaluate the following factors:

  • Company information (i.e., address, proprietorship or parent company, subsidiaries)
  • Annual revenue
  • Lending risk factors (i.e., late payments, defaults, liens)
  • Banking history (i.e., on-time payments, loans)

Establishing your creditworthiness as a business is much like establishing it as an individual. Pay your lenders and vendors on time. You never want to be 90+ days past due on any invoices. Keep your credit-utilization ratio low.

When you start a new business, knowing your commercial credit score is critical in obtaining the best lending rates and financing. Additionally, you may discover inaccuracies in your report that must be rectified before you seek business loan qualification. If you do find errors, contact the major business credit bureaus to correct them.

You wouldn’t buy a new home without first checking your credit score. And you shouldn’t do business with a company without checking their credit as well. If you are interested in obtaining the credit report on a business, you do not need permission. Commercial credit scores are public record.

As a leader in B2B collections, Alexander Miller & Associates understands the critical importance of obtaining commercial credit reports not only for your business, but for any business you may lend to or partner with, in the past or future.

We offer free commercial credit reports. Our report is a comprehensive list of UCC filings, open or pending lawsuits and derogatory credit information. Request your free commercial credit report today.