The importance of business credit report cannot be ignored as it determines whether your business is trustworthy. Every business owner must take great care to ensure that their business credit report is on the right track. This article tells you in detail regarding business credit report:
How business credit report and personal credit report is connected?
What is the purpose of business credit reports?
Will paying off business loan faster help you in improving your business credit report?
If you own your own business, you need to understand how business credit reports work. In fact, business credit reports could determine whether your business gets the loans, insurance, and credit it needs for expansion or even everyday business tasks. As a business owner, no matter how busy you are, you need to care for your business credit. By doing so, you will be safeguarding your finances and your company’s prosperous future.
What is the Difference between Personal Credit Reports and Business Credit Reports?
Business credit reports are established by credit reporting agencies when a business borrows from a lender. Business credit reports contain business information such as business name and business address, business loans, business debt and bill payments, federal tax identification number (FIN), and other information about your business credit and financial life. This information is gathered by business credit bureaus such as Dun and Bradstreet, Experian Business, Equifax Business, and Business Credit USA. While business credit reports are used to generate credit scores, just like personal credit reports, the scale is different. Businesses have credit scores between 0 and 100, with anything over 75 being a god score. Personal credit scores, on the other hand, range from 300 to 850.
Personal credit reports are gathered by different credit bureaus and tend to contain different information. Personal credit reports contain identifying information, employer history, address history, and account histories. Business credit reports are geared towards business needs and so are maintained differently. However, business credit reports and personal credit reports are used for the same purpose. Just as a personal credit report gives potential lenders a credit history that can determine your creditworthiness, so business credit reports are used by other businesses when determining business loans and other business transactions.
Business Credit Reports and Personal Credit Reports- What is the Connection?
Even though personal and business credit reports are very different, there may be some overlap between the two types of reports. If you are a business owner, you may have used personal lines of credit or personal credit cards to get your business started. If this is the case, the loans you have taken out on your personal account count towards your personal credit report, not your business credit report. If you run a small business, too, your personal capital may be very closely involved with your business finances. In fact, many small business credit reports closely resemble the personal credit reports of the company owners.