If you are in the process of securing funds for a small business, there is a lot you need to consider. One of the most important factors is your business credit profile. Before applying for a small business loan, it is essential you check your credit reports and work on repairing any damage that has been done over the years.
How can you figure out what is on your credit and repair problems, improving the chances you will be approved for a business loan?
What is the Dun & Bradstreet Business Credit Score ?
Dun & Bradstreet uses a scoring system called PAYDEX. This scoring model enables lenders to assess your business’s risk factor. It is based on a variety of information and makes it easy for lenders to make a determination about you. The more you know about this score and the higher the score is the better your odds of being approved for a loan.
Request Your Experian Credit Score
Your Credit Score report from Experian allows you to monitor the health of your business credit and receive alerts when there are changes. It gives you a comprehensive analysis of your credit and allows you to keep tabs on your situation.
Understand Your FICO SBSS Score
It is also important to know your score given by the Fair Isaac Corporation’s Small Business Scoring Service. It is used by banks and other lenders and is a three-digit number that measures your business’s lending risk. It is compiled by using your personal and business financial information, so you will want to focus on both to ensure the best possible score.
Once you understand where lenders get their information and how decisions are made about small business lending, you can focus on improving and repairing your credit. You should understand the difference between hard and soft credit inquiries (soft do not affect your credit score, hard do), limit your use of credit in the months leading up to securing your business loan, and know how to protect and grow your personal credit score.