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A strong business credit profile can mean better financing terms

As a business owner, you want to maintain both a strong personal credit history and a strong credit profile for your business.

It's important for your business to have a credit profile

You have an individual credit profile, but your business should have one, too. When you approach a financial institution to apply for business credit, the credit profile of your business will help determine whether or not you’re approved. Your business credit score is a number between 0 and 100; a score of 75 or greater is considered excellent.

Many factors affect your business credit score

A broad range of factors contribute to your credit score (Dun & Bradstreet, for example, considers about 150 factors in determining their credit ratings). Among these:

  • Do you pay your bills on time?
  • How much available credit do you have on bank lines of credit and credit cards?
  • How long have you had a credit profile?
  • How many inquiries have meen made on your credit profile?
  • In what industry do you do business?
  • What are your revenues and how many employees do you have?

Does your business already have a credit profile?

It might. You should contact the major business credit profile bureaus listed here and ask for your company's profile. If you don't have one, register your company with each of the bureaus. To do so, you'll need to provide some basic business information. This includes your tax ID number and a DUNS number , which you can apply for on the Dun & Bradstreet website. The other major profile bureaus are Equifax Business and Experian Business.

Monitor your credit information regularly

Changes in your business credit score can occur over the course of just a few months, so it's important to make sure your information with the credit bureaus is accurate and up to date. Changes in revenue, location, number of employees, lawsuits, liens and more can all affect your credit score, which in turn can affect how you conduct business with customers, suppliers and financial institutions. Monitoring your business credit profile regularly can also help protect you against identity theft.

A better credit score means a better bottom line

When your business has a good credit profile, you have a better chance of securing financing
when you need it. A better credit score means better financing terms—which means you pay  lower interest rates. When your suppliers see a high credit score, they’re more likely to extend credit. It all adds up to better cash flow and a healthier business.

DUNS number

DUNS stands for data universal numbering system. A nine-digit DUNS number uniquely identifies an individual business. This number can be used to access a database that provides information about that company, including name, address, telephone number, line of business and number of employees. DUNS numbers are assigned and maintained by Dun & Bradstreet.

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