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Business Credit Builder Program 

For Small To Medium Sized Businesses Nationwide

Are you under the impression that business credit and personal credit are one in the same? As a business owner, this is not a mistake you want to make. As we have discussed in the past, there are many differences between business and personal credit. So, if you want to avoid harming your business credit
,If you consider this as important as your personal credit, it is important to answer these three questions:
  1. What is business credit?
  2. Why do you need business credit?
  3. What steps can you take to improve business credit?
Once you know the answers to these questions, it is easier to make sound financial decisions that will have a positive impact on your business as a whole, as well as its credit score.
What is Business Credit?
Despite the differences between business and personal credit, there are also similarities. Business credit, also known as commercial credit, is defined by Investopedia as follows:
“A number indicating whether a company is a good candidate to lend money to or do business with. Business credit scores, also called commercial credit scores, are based on a company’s credit obligations and repayment histories with lenders and suppliers; any legal filings such as tax liens, judgments or bankruptcies; how long the company has operated; business type and size; and repayment performance relative to that of similar companies.”
Unlike a personal credit score, with a range of 300 and 850, business credit is scored on a 0 to 100 scale. Just the same as personal credit, the higher the score, the lower the lending risk. As an individual, you thrive to push your score as close to 850 as possible. As a business owner, 100 is the magic number.
Who Scores Business Credit?
There are three primary business credit scoring companies: Experian, Equifax, and Dun & Bradstreet. Since all three firms use a different scoring system, there is no guarantee that your score will be identical across the board. Even so, you should expect it to be within the same general range.
Note: it is important to examine your business credit report from time to time, ensuring that there are no errors (more on this below). An error can contribute to a lower score, thus harming your ability to obtain credit.
How is a business credit score calculated?
The credit reporting firms collect three basic types of information regarding your business:
Credit obligation information.
Legal filings
Details of your company’s background collected from public records, collection agencies, credit card companies, state filing offices, and other sources.
Your business credit score is then calculated based on the following factors:
Credit. This includes things such as credit utilization, payment habits, balances, and trends.
Demographic details. Business size, years in business, and Standard Industrial Classification (SIC) code. Public records. Amounts and frequency associated with bankruptcies, judgments, and liens.