How to Get an Accurate Read on Your Credit Score
When you’re in business for yourself, your personal credit score isn’t the only score you need to be aware of. Business credit scores can have a huge impact on your company’s ability to get approved for necessary funding, not to mention its public reputation. Here’s how to understand and maintain yours.
Making Sense of Your Score
You’re likely already in the habit of checking your personal credit score on a regular basis. Now it’s time to start keeping a close eye on your business report as well. Doing so will help you spot evidence of fraud or identity theft before it has a chance to do too much damage. It will also help you safeguard your business’s reputation, as business credit scores are available to any member of the general public who’d like to see them.
Your business’s report will show a lot of the same information you’d expect to see on your personal report, but with a few additional details, including:
- Credit usage over time and outstanding balances on any open accounts associated with your business.
- Basic information about your business, up to and including its size and classification.
- Any and all public records concerning your business. Examples include judgments, liens, or bankruptcies.
As a collective, this information determines your overall score. Unlike personal scores, which range from 300-850, business credit scores range from zero to 100. (A score of 75 or above is considered exemplary.)
Managing Your Score
If you find your current score leaves a little (or a lot) to be desired, don’t worry. As is the case with your personal score, there’s quite a bit you can do to work on your business’s credit as well. If you have outstanding balances, pay them off if you can. If that’s not possible, do your best to lower them instead.
Make sure you’re posting payments in a timely manner as well, and keep a close eye on your score going forward. (Incidents that negatively affect your report can remain a part of it for up to a decade.) You’ll also want to continue to monitor your personal report, as business credit scores and personal scores can affect one another.
Staying on top of your credit isn’t just a good idea. It’s one of the most responsible things you can do when it comes to taking care of your business and helping it reach its full potential. Make regular credit checks a part of your routine effective immediately.