Business owners often enjoy the privilege of being able to acquire Credit individually and as an enterprise. They can take the advantage of business credit to expand and build their organizations. Most business owners are often unaware about the intricacies involved in building business credit. Most financial institutions check the Business Credit Report of an organization before lending finances to them. It is hence important for business owners to build business credit.

The business credit score usually range between 0 to 100. A score of 75 is generally considered good. On the other hand, personal credit scores generally range between 300 to 800. A personal credit score of 680 and higher is considered good.

The credit score is affected by numerous factors like the number of enquiries on the credit profile; the length the individual has had the credit profile, the total available credit and many more. A common mistake most business owners commit is applying for loans and business credit using the personal credit information. In this way, they risk their personal credit rating as it increases the number of enquiries on the credit score. Hence building a business credit score using personal history becomes difficult and may limit the chances of the business securing credit in future.

Building business credit score

The key to building a business credit score lies in finding companies that give credit to the business without making use of the personal credit information. Such companies usually take into account the business credit score and report the same to the appropriate agencies. This helps in building a favorable business credit profile.

It is also advisable for businesses to be registered with business credit bureaus in order to establish credit scores. Complying with the market credit requirements is also important in order to increase the chances of getting credit approvals. These market credit requirements include getting proper licenses and complying with Federal and State requirements. Most Business Credit Check Services also take into consideration the business plan and financial statements of companies.

It is hence important for business owners to ensure that these documents are maintained. Similarly, it is also essential to ensure that the debts are paid and the credit profile is kept active by making regular payments to the institutions which have granted credit. All these factors can help a business build its credit score.