The 5 Things Driving Your Business Credit Score Rating Business - TopicsExpress

The 5 Things Driving Your Business Credit Score Rating Business credit score ratings can be confusing. Each business credit reporting agency uses various metrics in calculating its business credit scores. For example, Dun & Bradstreet uses up to 875 payment experiences to generate a company’s PAYDEX® Score and up to 80 payment experiences are reported in your business credit report. So without getting into all the various scoring models, formulas, historical analysis and all that jazz, let’s talk about what you can do on a company level to maximize your business credit scores. Here are five main factors that drive your business credit ratings: 1) Company profile – the profile and records of your business plays a crucial role in how lenders assess the viability of your company. A combination of factors such as financials, registrations, years in business, industry classification, and company size play a key part during risk assessment. For example, business credit agency, Dun & Bradstreet, assign a “5A” to “HH” rating classification to reflect a company’s size based on worth or equity. This rating is assigned only to companies that have supplied financial statements to D&B. If you look at how Equifax Small Business returns detailed information on your business report it provides registrations, filing dates, incorporation date, registry number, and the status of your business on record with the Secretary of State whether its active or inactive. So it’s important that all your business documents, financials, filings, and registrations are up to date and complete in order for your business credit report to reflect up to date and accurate information for creditors to view. 2) Payment history – your company’s payment experiences show how the bills are paid in relation to the terms your company has with suppliers, creditors, and lenders. While each business credit reporting agency utilizes various reporting metrics; age, activity, and payment history play the largest role in your business credit ratings. Other than paying all your invoices on time, it’s important to use your credit on a regular basis. A consistent trend of purchases and timely payments is what establishes a positive payment history. 3) Credit limits – having sizable individual and combined credit limits extended to your company afford you the chance to obtain even higher limits from other lenders. Credit limits clearly show what level of risk creditors are willing to extend to your business. It is also a useful starting point for new lenders when determining what amount of credit to extend to your company. 4) Credit utilization ratio – while the size of credit limits show what amount of credit your creditors are willing to extend to your business; your debt to credit utilization ratio shows how well your company manages its. In my opinion keeping your business debt to credit ratios at 50% or below on individual accounts and overall is ideal. 5) Credit diversity – the types of credit your business has reporting plays a significant role in your overall creditworthiness. Having net 30-60 day term accounts, revolving accounts, installment accounts, and open accounts all play a crucial role. A diversity of credit account types shows creditors that your company can handle various forms of financing responsibly. Keep in mind your business credit scores will tend to fluctuate with each agency so it’s important to monitor your files regularly. In addition, each business credit report will be different with each agency. This occurs because the business credit agencies do not share data and not all creditors, suppliers, and lenders share data with all three agencies. One supplier may submit data only to D&B while another lender may share data only with Corporate Experian. Ready to start building your business credit scores? We can show you the way. . . Contact us today IFUNDANYLOANS or call 714-283-1828 or email: [email protected] ***IS YOUR CREDIT SCORE HOLDING YOU BACK? OUR 30 MINUTE CREDIT CLEAN UP IS THE SOLUTION YOU HAVE BEEN WAITING FOR: MRCREDITREPAIR.biz