Understanding Business Credit Reports is critical if you are the owner or a small to medium sized business owner. Understanding Business Credit Reports, is absolutely critical if you are the owner or a small to medium sized business owner. Before digging into the details regarding business credit reports, however, it is important to understand just why they are so vital, and why this is so difficult an issue for so many. Understanding Business Credit Reports is the only way to get the most from your small business finances.
Your business credit reports contain important information about your finances as a whole. They also contain personal information that your creditors and other third-party lenders will need. This personal information comes in three parts; social security number, name, address, telephone number, birth date, gender, and date of birth. The third-party lender information that comes in your business credit reports is what you use to make lending decisions, which is what ultimately raises your score.
You credit reports contain three parts, including your payment history. Part one is your payment history. Your payment history is broken down by the number of accounts that you have open, the length of time you have been making payments, and the total amount you have paid off. The longer your payment history, the better your score will be. Part two of your credit reports is your solid financial history, which includes your payment history.
Your solid financial history includes your payment history, your total debt, the amount of new credit that you have applied for, and the amount of business credit that you have already applied for. All of these things are reported to the bureaus. One of the bureaus, Equifax, is the main reporting agency for your Equifax business credit report. Any of the other companies will also include your payment history, but they may not report the full amount of it.
Another aspect of your business credit reports is your utilization rating, or how well you pay your bills. Your utilization rating is determined by the sum of payments you have made to all your creditors, including all the lenders that listed on your Equifax business credit report. Part of your score is determined by the total amount that you owe, the total number of accounts you have, and the total that you have paid off.
A portion of your Equifax business credit reports looks into your past hiring practices. This section checks to see if the employer has filed any complaints with the bureaus about any of your past employment practices. It can also check to see if there is a judgment issued against you in a civil court. If this information is on your business credit reports, the score will be lowered. It will even drop lower if another company has accused you of something, even if it is not true.
A good business credit score is determined by the credit bureaus, using a complex formula. Sometimes, it can be difficult to know whether your credit score is too low or too high. Using a credit score analyzer is one way to help you see if your credit score is fair or not. A credit score analyzer can provide you with a good idea . . . . . . of where you are in regards to your credit utilization, bad debt, etc.
Once you have obtained a copy of your Equifax business credit score, it is important that you review it. You should look at it closely to make sure all the items on it are correct. There are a lot of things that people forget to report. Therefore, there could be errors on your credit score. Reviewing your credit score with a financial history software program can help you make sure your credit score is in good standing.