A complete and accurate business credit report is like a gourmet meal to a loan underwriter. Your business credit report is important for your company getting a business loan, because it tends to verify the information provided in your credit application and business plan. Much like a personal credit report, unless it is managed, the business credit report is often inaccurate, incomplete, and presents your company in a poorer light than it should. If you want to maximize your chances of getting your business approved for a business loan or equipment lease, ensure that your business credit report is accurate and complete, and do it very early in the process. In fact, why don’t you do it now?
Business credit reports are sold to the credit underwriters employed by lenders and equipment lessors. Dun & Bradstreet is the largest supplier of business credit reports, but it is by no means the only one. The data that goes into the business credit report comes from a lot of different public and non-public sources: lenders pool business credit information on a voluntary basis and public information is obtained and synthesized from sources like the Secretary of State or the Division of Corporations. But don’t trust that the information is accurate. Take the responsibility to verify the report and then add as much information as possible.
The first step, of course, is to get a copy of your business credit report. No need to pay for it; you can get one for free from any provider and you can modify the information (within limits) either online or over the phone. We recommend doing it online. Once you have the business credit report, verify it or correct it, following these tips:
- Make sure the business credit report accurately shows the business name, and any trade styles (DBA’s).
- Verify the physical business address, and include your website address.
- Look at the payments score in detail. Is it accurate? Does it accurately show payment promptness? If not, you can challenge an entry that shows the payment was paid later than it actually was, but you’ll have to be able to prove it.
- Is ownership of the business accurately explained, and does the report properly show the business entity type (partnership, LLC, corporation), and time in business?
- The business credit report allows you to add the name of the officers of the company, the title and business function, and some work experience.
- It also provides for entry of the history of the company and any recent company events, such as a move to a new location, a change in ownership, etc.
- You can decide whether to add financial information about the company, but remember that you will be making sometimes sensitive information available to everyone if you do so.
- The business credit report will show liens, lawsuits, and loans. Make sure this information is accurate.
Managing your business credit report is a good practice. Schedule a follow-up in a year to revisit the report and check any changes or to add new information.
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