Did You Know Your Business Has A Credit Score?
Business credit is credit under a company’s EIN. It has no association with the owner’s Social Security number. It is separate from personal credit, and therefore a business credit score can differ drastically from your personal score.
Who is it for?
This is credit in the business’s name and it is based on the business’s ability to pay, not the business owner’s. When done right, it is possible to get some business funding based on a business credit score without a personal guarantee. Also, you, the business owner, aren’t personally liable for the credit the business gets.
What are Business Credit Scores Used For?
Business credit scores are generally used to determine the ability of a business to repay a loan. The higher the business credit score, the more confident a lender, financial institution, or third party business can feel about completing a financial transaction that requires credit.
Where Do You Get a Business Credit Score?
Typically you get a business credit score from one of the four main business credit reporting agencies: Dun & Bradstreet, Equifax, Experian, and FICO. Three of them give a numerical credit score, and one, Equifax, offers three different numbers to provide insights into different areas of a company’s financial standing. Here’s a rundown of all the main options to help small business owners understand what each of these business credit scores means.
Does Every Business Have a Credit History?
Not every small business has a credit score or history like consumer credit. In fact, if you’ve ever wondered, “does my LLC have a credit score?” the answer is: it may, but just as likely may not. If your company has a long history of keeping its own accounts and building up financial transactions, you can probably access fairly reliable credit information about your business. However, here are some of the reasons why you may not have anything of substance to measure when it comes to your business credit.
Not every small business has a credit score or history like consumer credit. In fact, if you’ve ever wondered, “does my LLC have a credit score?” the answer is: it may, but just as likely may not. If your company has a long history of keeping its own accounts and building up financial transactions, you can probably access fairly reliable credit information about your business. However, here are some of the reasons why you may not have anything of substance to measure when it comes to your business credit.
