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How to Manage Your Company Credit Report

Just like individuals, there are credit reports for companies,  and while it is a little different to perform a credit search on a business, the reports themselves still have the same goal of giving creditors and lenders a tool to approve or deny credit and loan requests.

So if you want your business to get approved for leases and to obtain favorable credit terms on purchases and loans, it is important for the business to manage their credit in much the same way a person manages his own report and credit score.

That means that firstly you must pay your bills on time because at the heart of a company credit report is the payment history on your company's trade lines and credit obligations. This means that your vendors submit payment information on you as to whether you paid your bills as agreed or late, and perhaps will also show additional vendor information such as your highest credit limit, your average balance, and maybe the number of days on average it takes you to pay your bills.

Of course this means there must be some payment history in your file to measure on your company because if everything is done in cash or with a credit card, your tradeline data may just show you as a cash only business.  So generally speaking if you want credit terms, you must show an increasing and favorable history of paying on credit terms, i.e. you must open some credit accounts and have some vendors who extend credit terms to you.

Liens and judgments and even previous bankruptcies may also show up on your company credit report, so don't be surprised that your business report has these items on there.

Company formation history and incorporation information may also show up, as well as estimates for revenue and employment level.  Some of this information is supplied by you, so make sure it is reasonably up to date.

The bottomline for businesses is that if you want credit extended to you at some point in the future, the time is now to start laying the foundation for your company's credit report.  Open some credit accounts, and be sure to pay your bills on time.

 

Related topics:

Ordering Company Credit Reports

Getting Your Business Credit File Started