Some business owners rely on their personal credit for business financing, but the ones who take their business’s credibility and financial viability really seriously work to build business credit.
Having excellent business credit prepares a business for just about anything. Expansion, research and development, buying out struggling competitors, moving into larger facilities, and purchasing new machinery all require capital, and access to capital is exactly what a good business credit rating provides.
But, an unfortunate number of business owners, even those who know the importance of their business’s credit rating, neglect to monitor their business’s credit ratings. They might assume that as long as they pay their bills on time, all will be well with their credit ratings. Paying on time should certainly be a priority, but monitoring credit files is also crucial. Why is it so important?
A Keen Understanding
Business owners who monitor their business credit ratings are able to keep close tabs on exactly how their actions affect their creditworthiness, and are thus able to impact their credit scores more effectively. This gives them an upper hand when preparing to apply for a loan, line of credit, or business credit card.
Bad Things Happen to Good Credit
Credit reporting errors can sometimes show up on a business’s credit report without warning. Balances may be incorrect, account limits may be wrong, and payment histories may be erroneously listed. All of these factors can cause a business’s interest rates to skyrocket, or cause financing requests to be denied. Rather than running the risk of being blindsided by reporting errors, smart business owners monitor their business’s credit files.
Stop Fraudsters Cold
In the event that fraudsters gain access to a business’s financial data, their next step will probably be to exploit it for their own gain. Such attempts will generally show up on credit reports before they might otherwise be detected, in the form of multiple credit checks, accounts with dubious vendors, or other classic red flags. Business credit monitoring is an excellent early warning system against small-business fraud.
Make It Easy on Yourself
While monitoring one’s business credit can be done without a credit monitoring service, it can be confusing and time-consuming. That’s why many business owners choose to take advantage of business credit monitoring services, such as CreditMonitorTM from Dun & Bradstreet For a nominal fee, this service provides small-business owners with alerts any time changes occur in their business credit file.