Since Business Credit Is Highly Unregulated Most Companies and Business Owners Are Unaware of How Important It Is
Tracy Becker, FICO Pro CEO & President of Credit Restoration and Education at North Shore Advisory, Inc.
Personal credit reports and scores are a hot topic these days and there is a wealth of information available online to help educate consumers on how they work, their significance, and regulations pertaining to them. When a bank rejects a consumer for a mortgage the law requires the bank give an explanation for the rejection and the credit score used in the decision making is supplied to the consumer.
On the other hand, opposite rules apply for business lending and business credit information. When applying for a business loan a bank doesn’t need to divulge if it used a copy of your business credit reports, scores, and indexes to make a decision. If businesses actually knew how easily accessible a copy of their business credit was and how limited and poorly the scores might reflect on them, they would be running to get a copy of their Dun & Bradstreet or Experian business credit profile. Equifax is also a business credit bureau but is rarely used.
However, building a well-balanced and positive business credit profile can be a great asset for a company. Unfortunately business owners & professionals believe if a company has credit it will automatically be listed on their credit profile and reflect on their score. Actually, this is the furthest from the truth. Many vendors, lenders, and creditors do not report to the bureaus and it is difficult for companies to figure out which ones do. Having a professional credit expert guide and build the right credit can give a company an edge in getting loan approvals and the best interest rates.