Frequently Asked Questions
How do I get my own Business Credit Report?
We can provide your business credit report from Experian and D&B - together in one report - and monitor it for FREE for 12 months.
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What determines my score?
The CCR score ranges between 0 and 100: the closer to 100 the lower the risk and the closer to 0 the higher the risk. Scores are affected by:
- How you pay your suppliers, banks, and credit cards.
- Years in business.
- Derogatory public record items, such as judgments, tax liens, and bankruptcy.
- Collection placements.
How will having a good business credit score benefit my company?
Your suppliers, bank, insurance company, partners, and customers will be checking your company to make sure they get paid, contracts are fulfilled, and that your company is of good credit character. Good credit is important to grow your business…
- Save money by obtaining lower insurance rates.
- Lower interest rates.
- Obtain business credit without the need for a personal guarantee. This reduces your personal liability and protects your personal assets.
- Leverage in dealing with suppliers, banks, and leasing companies for better terms since your company will be a good account.
- Competitive edge for bids (most bids also require a credit report on each company responding).
How do I maintain and grow a good business credit score?
- Pay your suppliers, bank loans, lines of credit, leases, and all taxes on time.
- Tell us which of your suppliers you would like to see reporting payment information on your company.
- Apply for credit cards in your business name and make sure to buy from suppliers in your business name.
- If you are leasing equipment, make sure to put the lease in the business name.
Why aren't all of my suppliers / creditors listed in my business credit report?
If a supplier you deal with isn't listed on your business credit report, it's most likely because the supplier doesn't report your business payment history to any one or all of the credit bureaus. Not all suppliers report payment history to the bureaus and if they do report they may not report to all three bureaus.
Why isn’t there a credit report or a score on my business?
If you are not credit active with suppliers or sources that report to the bureaus, there will not be a business credit report or score on your company. If you ARE credit active, your suppliers are not reporting payment information on your company. There are no bank loans, lines of credit or leases being reported on your company. There is no derogatory public record data (bankruptcy, tax liens, judgments, etc.) on your company. No company data is being reported.
Can I look at business credit reports on other companies that are not my own?
Yes. No approval is needed from a business owner to order a business credit report. Unlike personal credit reports which are regulated under permissible purposes only, commercial business credit reports can be ordered as often as you wish.
How to make corrections with Experian, Equifax and Dun & Bradstreet
If you need to dispute certain details on your business credit report, please follow the instructions below.
Each section of the report will identify the source of the information; please make sure that you are sending the correction to the right information provider.
For corrections with Dun & Bradstreet call 800-234-3867
For corrections with Experian Commercial Relations:
- Email a PDF of the corrections on your company letterhead to BCFdataupdate@experian.com, include your company contact information and make sure the corrections are signed by a company officer
- Or mail this information to; Experian Commercial Relations BCF, PO BOX 5001 Costa Mesa CA 92628-5001
- Or fax this information to Experian at: 714-830-2903 attn BCF data update
For corrections with Equifax please use this form and follow the instructions.
Are there advantages for maintaining business credit separate from personal credit?
There are many advantages to establishing and maintaining solid business credit.
- With better business credit you will be able to obtain more working capital for your business. You may also be able to borrow money at lower rates.
- Having a separate line of business credit, such as a business credit card, makes it easy to keep your business expenses separate from your personal expenses. This will help with tax preparation and record keeping.
- With a business credit line, you can also extend credit to your employees by requesting additional cards. You can even control how much they can spend by adjusting their credit limits.
- Some business credit cards offer rewards that you can use personally or to help grow your business. Having these cards separate will help protect each from the other.
Why is it important to establish a business credit report separate from personal credit?
As an entrepreneur, did you know you have a unique opportunity to build, maintain, and acquire credit both individually and as a business owner? That's good news if you're trying to build and grow a small business because you won't have to rely solely on your personal credit to do that.
It is estimated that fewer than 10 percent of all entrepreneurs know about or truly understand how business credit is established and tracked, and how it affects their lives and businesses.
Let's take a look at how personal credit differs from business credit.
Personal vs. Business Credit
In the beginning every business owner usually has to depend upon the strength of their personal credit to fund & start their business. OPM (other people’s money) is great …if you can get it to help fund your business. At the point an individual with a social security number accepts their first job or applies for their first credit card, a credit profile is started with the personal credit reporting agencies. This profile, otherwise known as a credit report, is added with every credit inquiry, credit application submitted, change of address and job change. The information is typically reported to the credit bureaus by those who are issuing credit. Eventually, the credit report becomes a statement of an individual's ability to pay back a debt.
The same is true for businesses. When a business issues another business credit, it's referred to as trade credit. Trade, or business, credit is the single largest source of lending in the world.
Information about trade credit transactions is gathered by the business credit bureaus, such as Experian, Equifax, and D&B, to create your business credit report using your business name, address, and federal tax identification number (FIN), also known as an employer identification number (EIN), which you get from the IRS. The business credit bureaus use this compiled data to generate a report about your company's business credit transactions. In many cases, those issuing credit to you will rely on your business credit report to determine if they want to grant you credit and how much credit they'll give.
The mistake many business owners make is using their personal information to apply for business credit, leases, and loans. By doing so, they risk having a lower personal credit score and are not building their business credit report / score.
The key to establishing a business credit profile and score is to find companies that will establish credit in your business name…even if your personal credit information is being used as a guarantee for payment.
What steps can I take to establish a business credit report and score?
The following are the basic steps you need to take to establish a business credit profile and help build a business credit report and score:
- Form a corporation or LLC to operate your business under and obtain an FIN or EIN from the IRS. You can apply for an EIN number at the IRS website. Forming a corporation or LLC as opposed to structuring your business as a sole proprietorship or partnership has benefits. Corporations and LLCs afford business owners liability protection, and you can build a business credit profile that's separate from your personal debts. Hopefully, you may be able to apply with some creditors under your business's name and obtain credit without a personal credit check or guarantee if the credit grantor will do so. In addition, as a sole proprietor or partner in a partnership, you're personally liable for the debts of the business and all your personal assets are at risk in the event of litigation.
- Comply with the business credit market requirements. It's extremely important for businesses to meet all the requirements of the credit market in order to ensure a higher likelihood of credit approval. In fact, not being in compliance with the credit market can raise red flags with both credit bureaus and grantors. The red flags include such simple things as not having a business license or a phone line. Most businesses will not grant credit to another business that hasn't taken the steps to set the company up with the proper licenses and local, state, and federal requirements.
- Prepare financial statements and a professional business plan. These documents are often required by many credit grantors.
- Find companies willing to grant credit to your business without a personal credit check or guarantee. When a company grants your business credit, be certain they report the payment experiences you have with them to the business credit bureaus.
- Manage your debt so you don't fall into trouble making your payments, which will negatively affect your business credit score. It's important to monitor your business credit report for changes, especially when you are building a business credit profile.
- Make monthly payments to credit grantors to keep your business credit profile active.
- At some point, almost every business needs some type of credit. To avoid having to use your personal credit history or guarantees and to obtain the best possible terms, start the steps necessary to build a business credit profile now before you really need it.
How does the current credit economic condition affect my small business?
With the banks tightening their credit requirements, entrepreneurs need to explore other strategies for finding the capital they need. One of the most important tools for small business owners is business credit, also referred to as trade credit. Trade credit is the single largest source of lending in the entire world. If you aren't using this source of credit you are stifling your ability to grow your company and surpass your competition.
Business credit or trade credit is when one business provides a service or sells a product to another business on credit terms. The business buying the service or product does not need to pay for the transaction up front but rather has terms to pay either monthly with interest or better yet in 30 or 60 days without interest. In fact, in most net 30 terms, grantors will provide the opportunity to pay early with a discount.
Can a personal guarantee on a business line of credit be avoided?
As a business owner starting and growing a business, you will find that almost everyone you work with on a lease, loan, or line of credit is going to ask for a personal guarantee. Use this to your advantage by having them report the payment history in your business name. All banks and other creditors will require your business to have the proper documentation, such as business license, up-to-date corporate records, and local, state, and federal requirements.
The second thing you can do is to negotiate. You need to be willing to negotiate and willing to walk away from a deal.
Bottom line, if you don't want to provide a personal guarantee, there are circumstances where you can avoid them. However, there are some circumstances where they are required, and you have no way of avoiding them. So pick your battles of when you should and shouldn't provide a personal guarantee. Determine how important the loan, line or lease is to your business. You can then decide if a personal guarantee is required.
How long will data remain on my report?
- Trade payment data-36 months
- Judgments-6 yrs 9 months
- Tax liens-6 yrs 9 months
- Bankruptcy-9 yrs 9 months
- UCC-5 yrs
- Collections-6 yrs 9 months