A business credit report is a compilation of your company’s credit history. It typically includes your tradeline balances, terms, and payments, plus certain business credit scores that reflect your creditworthiness.
If you’re a small business owner, you should review your business credit reports regularly, especially when building or applying for credit. Here’s what you should know about how they work to use them effectively.
Why Are Business Credit Reports Important?
Business credit reports are detailed summaries of your company’s credit history. That makes them useful to organizations considering doing business with you, especially prospective creditors and suppliers.
Your business credit reports contain the information these organizations need to assess your company’s creditworthiness. They’ll often analyze it to determine whether or not they want to work with you and what terms they can offer.
In other words, your business credit report is important because it affects your ability to access credit accounts. The more positive your business credit report, the easier it’ll be for you to borrow money and secure favorable repayment terms.
Most businesses need financing to fund their operations, but even those who don’t can benefit from certain forms of credit. For example, you can almost always use a net 30 account or business credit card to improve your monthly cash flow.
What’s Inside a Business Credit Report?
The businesses and creditors you open credit accounts with can report your activities to one or more business credit bureaus. These agencies organize the data they receive into business credit reports for your company.
Generally, they contain details like the following:
Company information: Business credit bureaus provide basic information about your company’s background to help readers identify your business and gain fundamental insight into its operations. For example, this might include your time in business, annual revenue, legal entity structure, and number of employees.
Ratings and recommendations: Consumer credit bureaus generally let companies like FICO and VantageScore provide credit ratings for individuals, but business credit bureaus tend to provide their own. As a result, you can usually find business credit scores, high-level metrics, and limit recommendations inside your business credit reports.
Tradeline history: Last but not least, your business credit file should contain a detailed breakdown of your business tradelines. That usually includes a record of your payment history, account terms, and outstanding balances.
While business credit reports generally follow a similar framework, reporting your activities to the business credit bureaus is optional. As a result, the details inside a business credit report can vary. Accounts may show in some reports and not in others.
Typical Business Credit Report Errors To Watch Out For
Contrary to what you might expect, business credit reports aren’t always reliable. Multiple parties are involved in their creation, so there’s plenty of room for human error.
If a data furnisher or business credit reporting agency makes a mistake, your report may misrepresent your creditworthiness. Some of the errors you should watch out for include the following:
Inaccurate identifying information: One common type of credit report error is a typo in your company’s background details, such as its address or Employer Identification Number (EIN). That won’t damage its creditworthiness directly, but it’s still worth addressing. It could cause another company’s credit account to be attributed to your business or could cause your company to have multiple business credit reports.
Inaccurate debt payment dates: The timeliness of your monthly payments is the most impactful factor in most business credit scores. As a result, even a single misreported payment date can significantly harm your creditworthiness. If someone falsely claims you’ve paid late, you should try to correct the mistake immediately.
Out-of-date account balances: Your outstanding debts are another significant factor in your creditworthiness. If yours are out of date, they're probably higher than they should be, in which case your scores may be lower than you deserve. Make sure you receive credit for the amounts you pay off.
The Fair Credit Reporting Act (FCRA) doesn’t guarantee businesses the same credit-related benefits as consumers. However, you can still dispute errors in your business credit reports online or by emailing the business credit bureaus.
Who Are the Top 4 Business Credit Bureaus?
There are many business credit bureaus, and lenders can reference any of them for insight into your company’s creditworthiness. However, the four most popular include the following:
Dun & Bradstreet: Dun & Bradstreet (D&B) is the oldest business credit bureau and arguably the most popular. It’s well-known for assigning DUNS numbers, which are nine-digit numbers used to identify businesses, much like Employer Identification Numbers (EIN). Its primary business credit score is the PAYDEX Score.
Experian Business: In addition to being one of the major consumer credit bureaus, Experian has a business division that's one of the go-to sources for commercial credit information. Its most popular small business credit score is the Intelliscore Plus.
Equifax Business: Like Experian, Equifax is a consumer and commercial credit bureau. It has three business credit scores that are popular with creditors and suppliers: the Credit Risk Score, Payment Index, Failure Risk Score, and the new OneScore for Commercial. OneScore uses both non-financial and financial business accounts in its calcuations, and you may hear more about it in the future.
Creditsafe: Though less widely known than the other leading business credit bureaus, Creditsafe is still well-established as a reliable source of business credit information. Its primary score is known simply as the Creditsafe Credit Score. Creditsafe has a large footpring outside of the US. If your company has an international footprint, don't be surprised if your vendors, suppliers, and creditors are pulling business credit reports from Creditsafe.
There’s usually no way to know which business credit bureau a creditor or supplier will use to assess your creditworthiness unless you ask. As a result, you should do your best to establish a positive history with each of them.
How Can I Build Business Credit?
Building a good business credit score is much like building a good personal credit score. It requires opening credit accounts in your company’s name, making timely payments, and keeping your credit utilization well below your credit limit.
Business credit accounts are more commonly known as business tradelines, and there are two types: vendor and financial. (Dun & Bradstreet refers to them as “trade references”, and Equifax calls them “trade experiences”.)
Vendor tradelines, also called trade credit accounts, come from other businesses, like your suppliers. They typically grant you extended repayment terms on invoices, such as net 30 or net 60 terms.
Meanwhile, financial tradelines come from organizations specializing in extending credit, such as banks and credit unions. They include more traditional credit accounts, such as small business loans and business credit cards.
If you're starting from scratch or improving a bad credit score, you usually have to target vendor tradelines first. They’re easier to qualify for as a new small business owner and don’t require a good credit history.
Alternatively, you can use bill reporting services like eCredable. Our Business Lift program lets you report expenses to the business credit bureaus, transforming them into vendor tradelines.
For example, you can report your office rent and utilities to Equifax and CreditSafe, plus your eCredable subscription payment to D&B and Experian in addition to Equifax and Creditsafe.
In addition to your ongoing activities, you can submit up to 24 months of historical payments to the bureaus. That’s one of the only ways to significantly extend your credit history overnight and rapidly improve your business credit score. Give it a try today!
Learn More: Build Business Credit in 30 Days
How Can I Check My Business Credit Reports and Scores?
The right to access your credit information freely is another of the FCRA’s benefits that only applies to consumers, not businesses. As a result, you generally have to pay to secure a copy of your business credit reports and scores.
If you sign up for an eCredable business program, you can purchase your Equifax Business Credit Report right from your dashboard!
For just $49.95 per report, you can see everything prospective creditors will check, including two Equifax business credit scores - OneScore for Commercial and Business Failure Score.
Otherwise, Business Credit Reports (BCR) is the most convenient way to access your business data. You can buy whatever information you need through the company’s website, including:
Individual business credit scores
Business credit reports from specific credit bureaus
Comprehensive credit reports with data from all four major bureaus
BCR typically charges less for these products than the business credit bureaus do.
Generally, the best deals are the products that consolidate credit reports and scores from multiple sources into a single document.
Are Business Credit Reports Public?
Unlike your personal credit report, business credit reports are available to the public. Anyone can secure a copy of them, even if they’re not the subject of the report or a prospective creditor.
However, that doesn’t mean business credit reports are freely available. Just as you have to pay to get a copy of your own information, you generally have to pay to get a copy of someone else’s.
To request another company’s business credit report, you must be able to identify them. You may need to use the company’s name and street address, tax ID, or some other unique identifier associated with them, such as their DUNS number.
Of course, unless your business often extends credit to other companies, you’re probably going to check your own reports far more often than anyone else’s. It’s wise to do so while building credit to monitor your progress and catch any errors early.
