How to Improve Your Business Credit Scores

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Business credit ranking is the method by which investors and lenders evaluate companies for their financial soundness, capability to repay loans, and potential ability to fulfill investor expectations in terms of growth. This ranking system is based on several factors including the amount of credit extended to the company, duration of credit history, and level of debt. These factors are used to gauge an organizations credit worthiness and its ability to pay back debt. In order to improve a companies Fico score the owners can use several tools available on the internet.

Business Credit

A number of finance companies provide online access to business owners for free. Dun & Bradstreet provides a very simple business credit score calculator that you can access from their website. It takes only a few seconds to complete and provides a companies overall FICO score along with the individual business credit scores for the last three years. A good understanding of business credit scores is essential before you even begin searching for small business financing companies. The most important factor when it comes to business loans is whether or not the lender believes you will be able to make timely payments on your new business loans.

Business funding companies often turn to credit scores when evaluating a small business borrower. Unfortunately, a business owner’s credibility can have a direct effect on their ability to get business loans. Businesses often look at the credibility of the borrower as a major indicator of their profitability and future growth potential. An organizations creditworthiness score is basically an indication of their level of ability to pay back loans. A creditworthy business can typically obtain a business loan with a lower interest rate than a non creditworthy business.

Dun & Bradstreet also offers a simple way to access business credit scores. This online tool allows you to access the business credit scores for different types of suppliers such as liquidators, large distributors, wholesalers, manufacturers, importers and exporters. If you need additional information on any type of suppliers, it is easy to find the information you are looking for with this easy to use online tool.

When a company is looking to finance a major purchase, like equipment or vehicles, they often look for financing from a bank or other financial institution. Businesses often try to obtain larger business credit scores by raising their credit limit and extending their lease terms. However, many banks only offer higher trade credit limits and lease terms to certain types of suppliers. These suppliers may have lower credit limits and higher lease term lengths. When a business is looking for a reliable and consistent source of funding that can provide them with a consistent stream of money without having to worry about defaulting on loans, they should consider lenders that offer higher trade credit limits and long lease terms for equipment and vehicles.

If you own a business, you should know that the FICO score is one of the most used and relied upon in the business world. Businesses often rely on their FICO score to gauge whether or not they will be able to secure major financing. A low FICO score or even a bad FICO score can result in the inability to get major financing. To avoid this type of situation, when you are looking for new suppliers, consider asking existing suppliers if they would be willing to work with your business to help improve your FICO score.