Do you know your business credit score?

When starting a new business, knowing your business credit score is an essential aspect of running a small business. The business credit score, just like the personal one, will show the credit-worthiness of the business and enable the owners to get credit from different agencies.  The individual’s personal FICO score covers a range of 300 to 850, with 850 being the more sought after rate by creditors, while the business credit score goes from 0-100. Additional scores are offered by different entities and this helps the business to assess their risk tolerance. There are algorithms which are normally used by credit bureaus in calculating the credit score for a business. There is currently no standard set by the industry for business credit scores. This causes the scores to vary from one credit bureau to the next.

The reports, or scores, when assessed for a business, will include only accounts that are held under the name of the company. It does not include personal accounts. In many instances, before credit is extended to a business, the lenders, or anyone who extends credit will take into consideration, the credit worthiness of the owner as well. Free credit reports can be accessed from any of the credit bureaus that are available to the business owner, as well as personal credit scores are available from many issuers of credit cards. This service is not available for the credit score of a business. Business credit scores for your business and other businesses are public information, as long as it has been paid for.

Credit bureaus have their own methods of calculating the credit worthiness of the company. Many times the data that the bureaus receive is incorrect, as each collect their information and verify it in different ways. Giving the bureaus access to information that can be used to verify their information can eliminate the incorrect data that is handed to the business owner. Those businesses that have a low probability of  late payments, based on their assessment, is generally the businesses that can successfully secure funding.

A new business owner can also look into accessing funding for startups by visiting the different bureaus and checking out their resources. They can also look at the stories from entrepreneurs and gain access to different types of  funding by filling out their questionnaire online. There are different ways in which a business owner can gain grants and loans at a low interest rate. The first and most important step is to explore the options that are available to business owners and see if  a grant for a small business is a viable option for your business.