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Business Credit Rating: Learn How To Establish And Improve Your Corporate Credit, Score And Ratings  Small Business Videos RSS Feed  

Business credit rating is just as important and separate from your personal credit rating. Potential lenders look at your business credit rating as a measure of financial risk - the risk that you might default on a loan. In today's day and age, and in the markets of the future, your capital is going to be very important, and therefore your credit rating is going to be vital to your success within your business. When it comes right down to it, you can't afford to not get capital, and therefore you can't afford to have a business credit rating that is not good.

All in all, the business credit rating is going to show potential lenders what type of a borrower you will be if you borrow money from them. Many people think that their business credit might not matter that much, but in reality, your credit rating is going to matter a lot because it is going to tie directly into how a business is seen and, consequently, how you are seen in the eyes of lenders whom you are asking for money.

Paydex score, which is published by Dun & Bradstreet. A paydex score of 80 means your business credit rating is excellent and that all of your bills are being paid within terms, whereas a paydex score of 63 may indicate that your bills are being paid 20 days beyond terms. Although D&B doesn't list the actual vendors that are reporting data on your Company, you can ask D&B to investigate any late payments that are reported by vendors that you feel may not be justified or any error reporting.

Experian is one of the mega-3 credit bureaus (along with Equifax and Transunion), and also uses specific Corporate Credit Profile ratings in order to grant credit worthiness scores to businesses and corporations. Experian relies on a couple of systems. This profile, otherwise known as a credit report, is added to with every credit inquiry, credit application submitted, change of address and job change. The information is typically reported to the credit bureaus by those who are issuing credit. Most people are aware of personal credit ratings, where your credit applications and payment record are used to build a profile of your ability to pay back a debt. The same is true for businesses, where credit agencies gather information about trade credit transactions to establish a business’s credit rating.

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