Some business owners are unconcerned about their business’s credit ratings, especially those who have not yet needed to take out business loans. Others who have built solid credit ratings may reason that there is no need to monitor their credit files, as they already know their credit is good. Business owners who are in the process of building credit might think that as long as they manage their accounts prudently, their credit ratings will continue to rise.
But the truth of the matter is that business credit monitoring is important for businesses at all stages of the credit-building process. Want to learn more? Keep reading.
Business Credit Monitoring Prevents Fraud
Small businesses have very high odds of falling prey to fraudsters, when compared with their larger counterparts. They are more vulnerable because they are often lacking the resources necessary to implement a comprehensive fraud-prevention program. Telltale fraud warning signs often show up on a business’s credit report before they appear elsewhere. Business owners who monitor their business credit can take immediate action as soon as these red flags are raised, mitigating the damage caused by fraudulent activity. Those that ignore their credit ratings may remain ignorant about these fraud indicators for an extended period of time, and this is one case when ignorance is definitely not bliss.
Monitoring Allows Errors to Be Disputed
Like fraud, credit reporting errors have been the source of unpleasant surprises for business owners who fail to monitor their business credit files. Credit reporting errors can be disputed and resolved, once they are discovered, but if the business owner is unaware of their existence, they can cause serious damage to a business’s ability to qualify for financing, and its reputation.
Credit Monitoring Provides Valuable Insight
Using a business credit monitoring service allows business owners to better understand the inner workings of their business’s credit ratings. When they make efforts to pay debts early, they can monitor their progress, and see exactly how their extra effort is boosting their scores. When they pay down high balances, they can observe the effects of their credit-to-debt ratio firsthand. In gaining insight into how their business credit ratings are affected by their actions, these business owners put themselves in a much better position to manage their business credit ratings in an effective manner.