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HISPANIC NETWORK MAGAZINE www.hnmagazine.com
B2B SUPPLIER DIVERSITY
L
ike many business owners, you may won- der the purpose of business credit. Why is your business credit a big part of your evaluation to know if your business is good? I get a lot of questions and thoughts about busi- ness credit from time to time. Starting from what is business credit? And how do I find one? To what lengths can you apply to get a positive rating score? Here, I answer eight commonly asked ques- tions about business credit.
What is business credit?
Business credit is a part of your business profile and a tool used to know the ability to pay back a loan. To keep it simple, business credit will help you buy something now and pay it later. You need to have a good credit score to prove to creditors that your business is worthy.
How can I get business credit?
You need your business to be established. Make it an LLC, partnership, corporation, sole proprietorship, etc. then your business credit profile will be created. Parts of the business profile are included in the public record. The business credit is public. So, anyone can look at it. Meanwhile, your personal credit score cant be viewed by anyone, but several things from it could affect your business credit posi- tively or negatively.
Answers to 8 Commonly Asked Questions About Business Credit
By Sharita Humphrey How to make a strong business credit profile?
It should be a priority to build a strong busi- ness credit profile. Even if you're a new busi- ness entrepreneur, you must have it like its a credit card for business. Start small and build your business credit from that stage. Heres a tip: Vendor credit is a smart way many new businesses establish their credit profile. Trade credit is probably one of the easiest ways to establish your business credit profile and a fantastic way to build a solid business credit score. You can use these two tips to increase your score at the start of your business.
Where can you go and see your business credit profile?
There are a lot of places you can go to view your business credit profile. All credit bureaus will give you access to view your score. They also want to ensure that your information and their records have the same accuracy. So, it makes sense to review your profile regularly. Theres no penalty for inquiring about your business credit profile, which is a nice perk.
What are the main business credit bureaus?
The top business credit bureaus in the country are Experian, Equifax and Dunn & Bradstreet. These three credit bureaus have a slight difference in creditworthiness evalu- ation. So, I recommend that you do good research on these three and decide which one is best for your business.
How often should you check your business credit profile?
If youre a conservative person, check your profile monthly. It's the best way to find errors and fix the minor issues before they go on too long. We pay the most attention to things that give impact, and checking your profile monthly is sufficient.
How can you improve your business credit profile?
If you dont like your business credit score right now, dont worry. There are ways to improve it, but it takes effort. Pay off your business credit often to keep the debt ratio low. Dont wait for monthly statements to come; pay them off each week. You can pay online or on your phone for easy convenience. Do you owe money to a creditor? Pay in full, and pay it off as quickly as possible. Dont close your credit accounts. The length of your credit history matters.
Does your time in business affect the score of your business credit profile?
It doesnt necessarily impact your credit profile, but if the business is in the early stage, it will be hard to find a small business loan. Strong profiles that show histories of credit and service debt can positively impact your profile. The longer your credit history, the more information your creditors can have in your profile to prove your creditworthiness, and they can determine if you have a good track record. In closing, there are a lot of commonly asked questions to be answered, but I believe these are the most common questions youll ind in other searches as well, and this is the most direct and informative answer we can give for new business entrepreneurs. Once you understand your business credit score, youll never feel helpless, and this will inform you about the status of your business.
Source: Score
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