4 Reasons to Check Your Business Credit Score

Your business has a certain value. A certain reputation it holds in the eyes of the market. You have built it all from the ground up and now you seek the best of opportunities for it to grow and scale. That means your business should be successful in attracting the right kind of people to it, and getting the right treatment from them.

Any opportunity for your business that may come today or in the future will definitely have some financial aspect attached to it. Maybe youre going to get a new round of funding, or a new insurance policy for your employees, or even a line of credit for a new product. All these opportunities demand a strong commitment from your end.  Your business needs to prove its worthiness of a new deal, its capability of growing and most importantly, its ability to pay the bills on time.  This assurance makes the investor, or the interested party, feel secure and motivated to offer an opportunity for your business. This is where your business credit score comes in.

Business Credit Score to establish your organization’s reputation

Just like your individual credit score, business credit score determines your organization creditworthiness by evaluating various aspects of the business financial structure. The information on your business credit report is used in the Credit Scoring Model. The score is then used by people when they’re considering your credit applications or loan applications, to predict how likely you are to pay them back in a timely fashion. A higher score means your business has a history of paying bills and returning loans on time. 

Knowing your business credit score is quite easy. The score needs to be updated and accurate. The problem arises when business owners are not updated on their current credit scores. Business owners could be accidentally deprived of good business opportunities due to their or someone else misunderstandings of the credit score.  For example, lets youre applying for a business loan. You need to know your exact credit score for business loan, so that you can get the most favourable loan terms as possible. This is why knowing your business credit score is of paramount importance.

Here are 4 crucial reasons for knowing your business credit score:

  • Discrepancies: Credit reports from various credit bureaus may not reflect the actual financial and risk status of your company. It is very important to keep a close credit check and analyse the credit reports to get rid of any errors or a mismatch, so that the final score comes out to be accurate.
  • Credit scores change quickly: Every business lender or investor submits a chunk of information as soon as they are done conducting business with you. This information contains their evaluations of your business risk and repayment ability. This influences your existing credit score [score at the time initiating a deal] as the information will provide newer insights into your business financial health. So, it is very important to stay updated on your credit score.
  • Avoiding fraud: Business credit manipulation and identity fraud is a common issue that has plagued all kinds of business verticals. This can severely tarnish your market reputation and become a major problem for all your future deals. Staying updated on your score keeps you alert against any suspicious activity.
  • Monitor the red flags: Red flags are the bad blots on your credit reports.  Every time something negative is reported against your company, something like bad consumer feedback, bounced cheque or missed repayments, a red flag is added in your credit report. Monitoring these red flags can help you implement stricter measures in your accounting/billing structure and avoid any fiascos in the future.

CRIF High Mark is a leading credit bureau in India that offers all kinds of services for business analytics, scoring, credit reporting and decision solutions.  To check your business credit score or to learn more about CRIF, you can visit the website- www.crifhighmark.com