Business Credit Scores
Don’t be intimidated by the technical sound of a “business credit score.” All it is is a number symbolizing the likelihood of your business repaying debts. The higher the score, the less likely the company is to default on its payments.There are three major business credit bureaus: Equifax, Experian, and Dun & Bradstreet. Each of these organizations has factors to consider to establish your company’s creditworthiness. Every business has its score from each of these credit bureaus. Banks and alternative lenders use these credit and FICO scores to determine whether or not to approve funding for the company in question.These credit scores are between 0 and 100 and are based on your company’s payment history.
Credit scores protect lenders from terrible investment decisions and assist those companies that make their payments in good time with getting more credit.Aside from your basic business credit score, Dun & Bradstreet and Equifax go a step (or two) further and calculate multiple scores. Banks and alternative lenders can request your Financial Stress Score (which predicts the possibility of your business closing without honoring debts). They can also request your Delinquency Predictor Score and your company’s likelihood of defaulting on scheduled payments. These scores are calculated based on a company’s prior habits, financial history, and the demography of the relevant and related market or industry. Having a low business credit score does not necessarily mean that your business is not financially viable as a debtor. A new company will have a low credit score because it doesn’t have any references yet.
Raising your business credit score entails opening accounts, taking loans, and then paying them off in timely installments. It’s pretty tricky to raise your credit score without proof of paid loans and accounts, and in fact, it’s impossible. If you have never had an account and have paid cash for everything – you’d think that would count in your favor…. Not so. You need to have existing credit to generate new credit.
At Business Credit New York, we know how to raise your credit rating and get you a good credit score. We know which vendor accounts will increase your credit rating, so even if you can pay cash – it’s a good idea to let us advise you as to which expenses should be made on a credit basis. Also, we know how to improve your credit score using only your EIN and not divulge your SSN. This means that your business credit will not affect your credit rating. You cannot be held personally liable for any outstanding expenses your business has incurred. It is not always easy to open accounts, especially for a new business with no credit history. At Business Credit New York, we know which Net 30 and Net 60 accounts give easy approval. Opening some of these accounts and making regular payments will go a long way toward raising your credit score. All you have to do is work with us. Your Personal Finance Officer will educate you and assist you with getting everything into place for loan applications and business funding and financing.
CONTACT BUSINESS CREDIT NEW YORK FOR THE EDGE YOU NEED