What is a Business Credit Report and Why Does it Matter?

Similar to an individual’s credit report or credit score, a business credit report is a

number based on a variety of factors that assesses the creditworthiness of a business.

Just as a person should be mindful of their own credit score in order to be able to make

sure they are considered credit worthy, a business should do the same. It’s imperative

that businesses not only keep track of their business credit, but also make an effort

towards improving it in order to help their business continue on a growth trajectory.

Essentially, good credit is a major key to getting approved for trade credit and financing.

If your business’s credit report is low or bad, potential partners may hesitate to work

with you because you’re considered too much of a financial risk. Your business credit

report can be pulled from three major consumer credit bureaus: Experian, Equifax and

Dun & Bradstreet.

Your business’s credit report is based on a few factors, mostly from information from

banks and companies that you trade with have: 

  • Payment history

  • Account details, usually including when you opened each account

  • Public records such as liens, judgments and bankruptcies

  • Outstanding debts

  • Company information including number of employees, sales, ownership, and subsidiaries

Payment history is perhaps one of the largest factors when calculating a credit score.

Missing payments or having a history of being unable to pay debts will drastically

decrease your score and raise red flags to potential lenders or suppliers. The credit utilization ratio is another vital factor. A high credit utilization ratio could indicate that a business is relying too heavily on debt to finance its operations and this could have an impact on their ability to repay loans in the future.

While a lot of these factors may seem familiar based on what you know from personal

credit scores and reports, one big difference in a business credit report is the score

range. Personal credit scores range from 250 - 900, while business credit scores on the

other hand can range from 1 to 100. A second difference between personal and

business credit scores is that business credit scores are available to anyone willing to

pay to access a company’s score. This means that suppliers, vendors or potential

partners can access this information at anytime, and make business decisions based off

of a business’s perceived credit worthiness. 

Checking the financial health of your business through your business credit report is an excellent habit to get into to promote the flourishing and growth of your business though creditworthiness. 

Are you ready to grow and protect your business? Impello Global is a trade finance

advisory boutique and trade credit and political risk insurance brokerage, headquartered in Seattle, Washington. We specialize in trade credit and political risk insurance and provide advisory services to companies and lenders who are looking to expand their trade finance capabilities.

If you are a company or a lender trying to better understand trade credit insurance or

looking for guidance as to how trade credit insurance can help improve working capital

financing, our team would be delighted to learn more about your business and discuss

options available to you. Please visit our website at www.impelloglobal.com or contact

us directly at info@impelloglobal.com.