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37 Replies Latest reply: Apr 28, 2009 3:08 PM by CommunityTeam RSS

Event:  How to increase your business credit score

CommunityTeam Novice
Currently Being Moderated
You've got a great idea and the capital and know-how to implement it. But entrepreneurial success also depends on something many small-business owners don't pay enough attention to: your business credit score.

The current economic climate makes it more important than ever for small-business owners to understand their business credit score. A strong business credit score and up-to-date information on the business credit report can help small-business owners access additional capital and even gain customers during difficult times.

Experian will be on SBOC to answer questions like:

  • What will a business credit report tell you?
  • What can impact a business credit score?
  • How can monitoring your business credit score help your business today?
  • What are the advantages for maintaining business credit separate from personal credit?
  • What steps can be taken to protect and improve your business credit score?

Experian's Business Information Services enables organizations to make better decisions through each phase of the Customer Life Cycle. Its business database provides verified information on U.S. companies, including the industry's most extensive data on small businesses. Experian® leverages more than 30 years' data management experience to provide market-leading blended risk products and services.

This interactive session will be led by executives from Experian's Business Information Services group:

Allen Anderson
President, Business Information Services

Adam Fingersh

Vice President, Strategy and Innovation

 


Post a question now, and then join us on April 28 at 2:00 p.m. EST for a response. Or join us during the event and post a question. Experian will try to answer as many questions as possible, but they may not get to all of them. Note, you do not need to register for the event. You simply need to be a member of SBOC to post a question. If you don't have a user ID, join now, it's free.

Experian will not be able to comment on other credit scoring companies and their policies, nor will feedback be provided to specific credit scores. So, please do not post your personal or business credit score on this public forum. For your information protection, these type of posts will be removed.

To learn more about your business credit report, visit http://www.businesscreditfacts.com/.
  • Re: Event Apr. 28:  Your business credit score
    brunoeisenhow Newbie
    Currently Being Moderated
    I am a new business owner and would just like to know how to get my business registered to obtain or start a credit score or rating. Also is it good to do just the Dun and brad thing or both that and the experian?
    • Re: Event Apr. 28:  Your business credit score
      Newbie
      Currently Being Moderated

      Brunoisenhow,

       


      Experian requires minimum information to generate a business credit
      report and score. If a business doesn't meet the requirements, a credit
      report and score are not generated. Minimum information is at least
      one tradeline and/or one demographic element.

      You can search Experian's database to find out if your business has a
      credit profile by going to http://www.smartbusinessreports.com. You
      don't have to be registered to locate a company in our database.
      Nonmembers interested in purchasing a report automatically will be
      directed to register.
      • Re: Event Apr. 28:  Your business credit score
        ChestnutLake Newbie
        Currently Being Moderated
        What is a "demographic element"?
        • Re: Event Apr. 28:  Your business credit score
          Newbie
          Currently Being Moderated

          ChestnutLake,

          Experian's report provides understandable business credit
          information, including comprehensive demographic, financial and
          public record information, as well as analytic scores:

           


          Credit: Number of trade experiences, outstanding balances,
          payment habits, credit utilization and trends over time

           


          Public records: Recency, frequency and dollar amounts associated
          with liens, judgments and bankruptcies

           


          Demographic information: Years on file, Standard Industrial
          Classification (SIC) code and business size
        • Re: Event Apr. 28:  Your business credit score
          ChestnutLake Newbie
          Currently Being Moderated
          Experian --
          Do you have any suggestions for establishing lines of credit for young businesses (that report to Experian)?

          In other words, can you give a list of 10-20 business suppliers that report, For example:

          Staples
          UPS
          Home Depot
          other ???

          We do business with both Staples and UPS, but pay directly via credit card. Is there some way to move that payment history to Experian? Is it just persuading these firms to offer an open account?
  • Re: Event Apr. 28:  Your business credit score
    ilyab0dner Novice
    Currently Being Moderated
    A credit card can help with your business credit score. Not just any credit card......

     


    A true business credit card is a line of credit that is taken in the name of the business, under the business' credit. Activity, whether good or bad, is reflected on your business' credit report through D&B and other financial institutions, and the liability for any debts incurred and bills owed is with the business.However, some companies out there offer "business" credit cards which they require a person guarantee for. These institutions will often ask for a personal guarantee, and will almost always ask for a social security number from the person applying for the card. If this is the case, the credit card is not a business credit card, but is simply a personal credit card which is used for the business. The business is not liable for bills and debts - you are.When applying for a credit card for your business, watch out for areas asking for your SSN (and not your TaxID or EIN) and be wary of any credit card that asks for a personal guarantee. By ensuring that your credit card is in the name of your business, you can help to build your business' credit, while avoiding creating problems with your own.

     


    Many companies offer a list of credit cards that are issued under the business name only. Those lists typically run $300-$900, depending on the quality of the information inquiring. I would suggest starting your search online via google or yahoo. Search for "strong business credit" (just like that in quotes) to find services that sell the information.

     


    Good luck,

     


    Ilya Bodner

     

    Small Business Owner

     

    Initial Underwriting Group
    • Re: Event Apr. 28:  Your business credit score
      tomgaz Newbie
      Currently Being Moderated

      Ilya,
      I appreciate your comments but my question is this. Other than the Home Depot Mastercard business card that's available without a PG do you really think there are multiple lenders out there who will offer visa/mc business credit cards without a PG? If you mean vendor lines of credit that don't have visa/mc option then of course there are many options but I wouldn't consider those to be business credit cards.

       


      I'm not sure that I agree with you that a business credit card that requires a PG is not a "true" business credit card but we can probably just have a difference in opinion on that one. Unless you're running a multi-million dollar business I don't think it's very realistic to think there are lots of lenders who will issue their business cards without the PG. I would love to be proven wrong on this one but I do agree with you that if the goal is to get the credit card to help build a D&B paydex score then that's usually not going to work. Very few business credit cards report to D&B.

       


      Perhaps I misunderstood you but please clarify if you know of multiple lenders who are currently offering business credit cards without PG's.

      Thanks Ilya. I certainly hope I'm wrong on this one.
    • Re: Event Apr. 28:  Your business credit score
      Newbie
      Currently Being Moderated

      Ilya and Tomgaz,

       


      It's true that many small-business owners fail to separate their business
      expenses from their personal expenses. The credit card used to take the
      family out to dinner also gets used to gas up a company vehicle or to pay for
      supplies used by the business. Half of all small businesses use some form of
      personal credit to finance their businesses.

      However, the weakness of relying solely on personal credit is clear. If your
      business ever becomes at risk, your personal credit score becomes at risk as
      well.

      Additionally, many creditors have begun moving away from relying on
      personal credit alone when judging the financial health of the owner's small
      business, as personal credit does not ideally predict future business behavior.
      Instead, many creditors have begun taking advantage of new blended
      commercial scoring tools that integrate both personal and business credit
      attributes to predict small-business risk.
      • Re: Event Apr. 28:  Your business credit score
        jimsuem Newbie
        Currently Being Moderated
        What are the most important factors in a businss credit score
        • Re: Event Apr. 28:  Your business credit score
          Newbie
          Currently Being Moderated

          Jimsuem,

          There are a number of factors that could have an adverse impact on
          your company's business credit score. Those factors include, but are
          not limited to:

           


          The presence of derogatory public records on the business profile,
          such as collections, liens, judgments and bankruptcies

           


          The status, recency, frequency and dollar amounts of any
          applicable liens, judgments or bankruptcies

           


          An increased trend in slow payment of obligations

           


          An increase in the number of business credit inquiries or
          applications that are generated by the business or owner

           


          The number of trade experiences, balances outstanding, payment
          habits, credit utilization and trends over time

           


          Years in business, line of business or SIC code, size of business
          and other demographic data
  • Re: Event Apr. 28:  Your business credit score
    Howard Novice
    Currently Being Moderated
    What makes up a business credit score vs. personal credit score?
    • Re: Event Apr. 28:  Your business credit score
      Newbie
      Currently Being Moderated

      Howard,

       


      The score model used to determine business credit is much like the score model
      used to determine personal credit. However, while a personal credit score can
      range from 350 to 850, a business credit score ranges from 0 to 100.

       


      Don't assume that your favorable personal credit score will be enough
      to secure a good business credit score. While lenders and vendors
      may initially consider your personal credit history, once your business
      pays its first bill, it will begin building its own credit history.
    • Re: Event Apr. 28:  Your business credit score
      Newbie
      Currently Being Moderated

      Here are some basic facts every small-business owner should know about
      business credit ratings:

       


      Business scoring is much less regulated than consumer credit scoring.
      The process of scoring your business is much more complicated and
      less clear than the consumer scoring process.

       


      Just because you have a business, don't assume you have a business
      credit score. Credit reporting companies require a minimum amount of
      information before they can generate a report and score for your
      business. To establish your business credit history, encourage
      vendors to report your payment history to one of the major credit
      reporting companies. Many credit reporting companies can provide
      you with information on suppliers who report to them.

       


      Don't rely on your personal credit rating to finance your business. If
      your business becomes at risk, so will your personal credit score.
      Keep in mind that many creditors are now looking at scoring tools that
      consider both personal and business credit to predict small-business
      risk.

       


      Access to business credit scores and reports is not restricted like
      personal credit reports. Business credit reports are available to the
      public, and anyone - including potential lenders and suppliers - can
      view your business credit report. This makes it imperative to monitor
      your business credit score and report.

       


      You can proactively manage your business credit score. Ensure your
      vendors are reporting your business payment history, and monitor
      your business's credit regularly. Experian's
      http://www.SmartBusinessReports.com and
      http://www.BusinessCreditFacts.com provide easy access to business
      credit reports and information about the business credit scoring
      process.
  • Re: Event Apr. 28:  Your business credit score
    TIRESPLUS Newbie
    Currently Being Moderated
    I have been in busisness for ten years now
    How can I improve my busisness credit score?
    • Re: Event Apr. 28:  Your business credit score
      Newbie
      Currently Being Moderated
      Tiresplus,

      First, ensure that your company's vendors are reporting your business
      payment history to one of the major credit reporting companies. The greater
      the number of vendors who report a good payment history to the credit
      reporting companies, the greater your business credit score will be.

      Just as you might monitor your personal credit, it is incredibly important to
      monitor your business credit consistently as well. Your business credit score
      is one of the first things lenders, suppliers and even some customers look at
      before deciding to do business with you. It's used to determine how much
      money lenders will loan you, how much credit suppliers will extend to you,
      what interest rates you'll be charged and what you'll pay for insurance
      premiums.

      By consistently monitoring your business credit score, you can ensure that
      your business has not fallen victim to business identity theft or fraud, the
      losses from which cost American companies billions of dollars each year.
      Furthermore, it's important to scan your business credit file for mistakes. As
      the business owner, you may request that the credit reporting companies
      correct any mistakes to ensure that your credit file is accurate.

      It's vitally important to be aware of possible inaccuracies or negative credit
      data on your credit file if they exist. By simply increasing your awareness of
      the factors that drive your current company credit score, you can begin to
      effectively manage your credit behavior. As always, the best thing that you
      can do is pay all financial obligations on time.
  • Re: Event Apr. 28:  Your business credit score
    CommunityTeam Novice
    Currently Being Moderated

    Questions about your business credit score? Join us for the event with Experian. We are collecting questions in advance, so if you have a question post now, by simply hitting reply.
  • Re: Event Apr. 28:  Your business credit score
    Menston Newbie
    Currently Being Moderated

    Meston is top10 refill cartridge manufacturer in China, I take part in small business today and would like to find some US buyers here.How can a fresh member raise the credit score?And how can I find the business partners
    • Re: Event Apr. 28:  Your business credit score
      Newbie
      Currently Being Moderated
      Menston,

      Just as a consumer credit report can help assess credit risk, a
      business credit report or score helps identify which businesses you
      want to do business with, what credit limits should be, and what credit
      or payment terms should be agreed to. The more you know about a
      business’s current financial obligations and its past payment history,
      the better you are able to either grow your customer list or protect
      yourself from risk. Visit http://www.SmartBusinessReports.com to find
      creditworthy business partners and customers.
  • Re: Event Apr. 28:  Your business credit score
    antiques4me Newbie
    Currently Being Moderated
    I am thinking about partnering with another company and am concerned about their financial stability.

    Is it possible for me to order a business credit report on this private company? Is this information public? If so, what information do I need to obtain or provide to order it?
  • Re: Event Apr. 28:  Your business credit score
    504man Newbie
    Currently Being Moderated
    MY COMPANY HAS BEEN AROUND FOR TWO YEARS NOW,BUT I HAVE NO CREDIT HISTORY,HOW CAN I OBTAIN CREDIT TO MY BUSINESS?
    • Re: Event Apr. 28:  Your business credit score
      Newbie
      Currently Being Moderated
      504man,

      Just like we do on your personal credit report, Experian accepts only
      company credit and payment history from creditors and suppliers. If
      you would like to see your creditors or suppliers report to Experian so
      your credit and payment history is displayed on your business credit
      report, please write a letter of request to your supplier. Experian
      http://www.BusinessCreditFacts.com provides you with the tools to
      easily do this. Visit our supplier page to access our letter template.
  • Re: Event Apr. 28:  Your business credit score
    CommunityTeam Novice
    Currently Being Moderated
    Community - please welcome Experian to SBOC. Experian will be with us until 3:00PM ET.

    If you have a question, simply login to you member account and hit reply. Please note that the event is moderated so you may not see your question post immediately. Experian will try to answer as many questions as possible but may not get to all of them. Also, don't forget to refresh your browsers so you can see Experian's latest response!
  • Re: Event Apr. 28:  Your business credit score
    Newbie
    Currently Being Moderated

    Welcome to today's forum! Before taking questions, here is a little more
    information about Experian and its experience with business credit reporting.

     


    Experian® has been doing business credit reporting and scoring for
    more than 30 years. In addition to business credit reports and scores,
    Experian also offers commercial portfolio management tools,
    commercial fraud tools and collections tools.

    Experian holds more demographic and credit information on
    individuals and businesses than any other company in the world,
    providing power and insight to better understand customer and
    prospect needs. We maintain credit information on approximately 215
    million U.S. consumers and more than 27 million public and private
    U.S. businesses.
  • Re: Event Apr. 28:  Your business credit score
    jackzee Newbie
    Currently Being Moderated
    I check my personal credit once a year, but what about my business credit? How often do I need to check/order that? And where can I do this?
  • Re: Event Apr. 28:  Your business credit score
    Bluesuit Apprentice
    Currently Being Moderated
    I know that the higher the score, the better & lower risk, but what is the normal/good range to be in?
  • Re: Event Apr. 28:  Your business credit score
    franklinplace Newbie
    Currently Being Moderated

    What available credit monitoring tools are at my disposal? How do they work and which ones do you recommend?
  • Re: Event Apr. 28:  Your business credit score
    fishnfrogs Newbie
    Currently Being Moderated
    In light of the current economy, how can a business credit report help my business today?
    • Re: Event Apr. 28:  Your business credit score
      Newbie
      Currently Being Moderated
      When the economy falters, small businesses face trying times
      • and there's no doubt that this is one of them.

      After years of cheap and readily available funding, businesses
      are finding credit harder to secure. For example, U.S.
      structured financing - the financing behind the financing -
      went from more than $300 billion per month in June 2007 to
      less than $50 billion per month in November 2007. Rising
      prices have put increased pressure on the cost of doing
      business. Consumers are tightening their belts in the face of a
      rising cost of living, a decline in home values and fears of a
      sharp economic slide being stoked by the press.

      For the moment, one downturn seams to lead to another, and
      businesses - large and small, across virtually all sectors of
      the economy - are feeling the squeeze. While the overall
      business bankruptcy rate is climbing, small businesses -
      particularly those whose owners used home equity or personal
      money to fund their enterprises - are battling for survival and
      are at risk for delinquency or default.

      Business owners need every tool at their disposal in times like
      these to avoid trouble and spot opportunities to grow. When
      success depends on the ability to build capital, business credit
      monitoring can help.

      That's why it's no surprise that we see the use of monitoring
      growing rapidly year after year - especially in the current
      economic environment.
  • Re: Event Apr. 28:  Your business credit score
    CommunityTeam Novice
    Currently Being Moderated

    Experian - thanks so much for sharing your expertise with the Small Business Online Community today. Community - please visit the following websites to learn more about your business credit score.

     


    http://www.smartbusinessreports.com
    http://www.businesscreditfacts.com

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