Business Credit
Before we get to the good stuff, let’s first discuss what exactly is business credit? It’s safe to say personal credit and business credit are not the same. A business credit score is a number that indicates whether a company would be a reliable borrower to receive a loan, tradelines, or become a business customer. The business credit score is based on a company’s credit obligations and repayment histories with their lenders and suppliers.
Some of the information you’ll find on your business credit report is:
Financial data. This data includes annual sales and may include a financial statement.
Payment history. This section shows a company’s payment history for the past several years. This includes invoice activity, outstanding balances, payment terms, and credit limits.
Public Records. This section lists legal filings, bankruptcies, collections, and UCC filings (Uniform Commercial Code (UCC) filings allow creditors to notify other creditors about a debtor’s assets used as collateral for a secured transaction). If a business has legal judgments or collection accounts reporting in this section, a creditor may view the business as being in financial distress and may be hesitant to work with it.