A guide to business credit reports

• A business credit report is a public-record summary of your company’s financial profile, business credit accounts, payment history, credit score, risk factors and negative items such as bankruptcies, lawsuits or liens.

• Business and personal credit reports are not the same. A business credit report describes the company; a personal credit report describes the individual. Business credit reports are also public records, while personal credit reports are not.

• Three major bureaus produce business credit reports—Experian, Equifax and Dun & Bradstreet. Dun & Bradstreet offers a free option for businesses with a D-U-N-S® Number; Experian and Equifax offer paid products.

• Strong business credit unlocks better loan terms, lower interest rates and easier vendor relationships. Payment history and credit utilization are the two largest levers business owners control.

• Checking your business credit report regularly helps you catch errors, prevent fraud and evaluate the financial health of prospective customers, vendors and partners before doing business with them.

A business credit report is a public-record summary of your company’s creditworthiness—its payment history, outstanding credit accounts, public records, risk factors and the business credit score lenders use to price loans and credit lines. It is sometimes also called a business credit profile or a commercial credit report. Whatever the name, it’s what banks, suppliers, insurers and prospective partners look at when they decide whether to extend credit to your business and on what terms.

Having a good business credit score is essential when it comes to getting approved for a loan, business credit card or other line of credit. It can also affect the loan’s terms—the better your credit score is, the better terms your business will typically enjoy.

Business credit reports are considered public records. That means you can also use a business credit report to review credit information about another organization before deciding to work with them, helping you avoid some potential financial risks.

Staying on top of your business’s financial health can be key to your success. The sections below cover what a business credit report contains, how business and personal credit reports differ, how to check yours with each of the major bureaus and how to build and improve business credit over time.

A business credit report typically contains your company’s financial profile, an overview of your business credit accounts, your payment history, your business credit score and risk factors and any negative public records. Lenders, suppliers, insurers and prospective business partners pull together these data points to evaluate your company:

• Financial information about your business

• An overview of your business credit accounts with suppliers, service providers and financial institutions

• A company profile, including name, address and phone numbers

• Background information, such as owners’ names and any subsidiaries

• Your current credit score and potential credit risk factors

• Payment history

• Negative information, such as bankruptcies, lawsuits or liens

Together, these data points let a third party assess how likely your company is to repay debts on time and meet its contractual obligations—the core question every credit decision is answering.

A business credit report describes a company; a personal credit report describes an individual. Although they’re used for similar purposes—to help determine creditworthiness—business credit reports are different from personal credit reports in a few important ways. A business credit report provides information on a company’s financial health and credit activity, while a personal credit report focuses on an individual’s credit history.

When you’re first starting out with a new business, lenders typically look at your personal credit score before approving your company for a loan or line of credit. But once your company is established, your business credit scores don’t take your personal credit scores into consideration.

Another important difference: business credit reports are public records, while personal credit reports are not. Anyone evaluating your company—a supplier, an insurer, a potential business partner—can pull your business credit information to gauge risk. That makes a business credit report a two-sided tool: it’s what others use to evaluate you, and it’s what you can use to evaluate them.

Knowing your business credit scores can be key to your company’s financial success. Checking your credit report helps you understand where your business stands financially, the types of loan terms you may qualify for and whether there’s room for improvement to get better terms in the future.

Keep in mind that potential vendors, partners and suppliers may also check your business credit report to determine whether you’ll be a good partner—and vice versa. Access to business credit reports allows each organization to learn more about their ability to repay debts and assess the risk of working together.

The three major business credit bureaus are Experian, Equifax and Dun & Bradstreet. Each offers its own products and pricing, and there are both free and paid paths to seeing your business credit information:

• Free: Dun & Bradstreet offers a free business credit report for businesses with a D-U-N-S® Number.

• Paid: Experian and Equifax both offer paid business credit report products. Dun & Bradstreet also has a paid, more-detailed version.

Each bureau collects somewhat different data and computes its own scores, so business owners often check more than one to get a complete picture of how their company appears to lenders and partners.

Experian allows you to check your own credit report and those of a business you might be considering working with. You’ll be able to view background business and financial information, credit scores and risk factors, payment and collection history, and more.

Experian offers four different business credit report products, ranging in price from around $40 for a one-time report to almost $1,500 for a detailed annual subscription. For more information about how to get a business credit report from Experian, you’ll need to sign up or subscribe through its website.

Like Experian, Equifax business credit reports offer the option of checking your own credit report and those of other companies. You’ll be able to view key company information, credit summaries, risk scores, public records and payment histories.

Complete the contact form on its website to learn more about pricing options and how to get a business credit report from Equifax.

Dun & Bradstreet (D&B) is a data and analytics company that offers business credit reports to help you monitor and manage your business credit scores. The D&B business credit report allows you to view multiple types of credit scores, ratings and data to see how financially stable and reliable a company is before engaging in business with them.

You can get a free business credit report from D&B as long as your business has a D-U-N-S® Number. They also offer a more detailed version for roughly $500 annually.

A good business credit report can help open the door to more favorable loan terms—like lower interest rates—for your business. Strong credit can also help your business get approved for a business credit card or a business loan, providing access to the funds you need to grow your company.

The most direct ways to improve your business credit are paying on time, keeping utilization low and making sure your good payment behavior is actually reported to the business credit bureaus. After you’ve established a business credit score, here are practical steps to build and improve it:

• Make payments on time. Payment history plays a key role in your business credit score. By paying your lenders, suppliers and vendors on time, you’ll show that you’re a reliable, financially stable company.

• Keep credit utilization low. Financial experts highly recommend keeping your credit usage under 30%. Try to use only the credit you need.

• Borrow from lenders that report to the business credit bureaus. If you’re thinking of opening a new line of credit, try to choose a lender that reports to the business credit bureaus. This will help build your credit history.

• Monitor your business credit report regularly. This helps you catch errors that could impact your credit. It can also help you spot signs of fraud early—and dispute inaccuracies so they don’t drag your score down.

A good business credit score is essential to your company’s financial well-being. Once you’ve established a good credit score, you’ll want to take steps to monitor and manage it for the long term—and that means checking your report regularly.

A few advantages of monitoring your business credit report include:

• Getting notifications of any changes that might impact your organization

• Staying on top of any inaccuracies so you can take immediate action to dispute them

• The ability to identify and improve any issues

• Monitoring inquiries on your report to help prevent identity theft

And because business credit reports are public records, you can pull the report of a prospective customer, vendor or partner to evaluate their financial health before doing business with them—reducing risk on both sides of the relationship.

Capital One offers business credit cards for those with excellent credit to fair credit, all with the ability to help cardholders earn rewards like cash back and bonus miles. Check to see if you’re pre-approved for a card, without it impacting your credit.

The information in this article is for educational and general informational purposes only. It is not intended to provide legal, tax, or financial advice. For specific guidance about your business, consult an attorney, tax advisor, or financial professional.

Trademarks: Experian® and Dun & Bradstreet D-U-N-S® are registered trademarks of their respective owners.