Exploring the World of Business Credit and Your Business Credit Score

Let’s chat about something essential in the business realm, business credit and the ever-mysterious business credit score. You may be wondering, what is the difference between my personal credit score and a business credit score?

What Is A Credit Score?

A personal credit score assists lenders to determine what sort of credit to offer you and on what terms. This score considers many different personal factors including credit card balances, timely payments and length of credit history. Basically, the higher your score, the better credit opportunities you will be offered. This type of score is tied directly to an individual.

Now, think of your business credit score as your business’s financial reputation, completely separate from your personal one. It’s the measure of how reliable your business is when it comes to meeting financial commitments. Similar to your personal credit score, a business credit score gives lenders and suppliers a quick snapshot of the risks involved in doing business with you.

Here are the basics of how a a business credit score is calculated:

  • Your Bills: timely payments build a strong business credit profile.
  • Credit Utilization: the amount of available credit on business credit cards.
  • Credit History: the more transactions on your credit profile, the more reliable you appear to lenders.
  • Public Records: legal issues, liens, or bankruptcies related to your business.

Where Is My Business Credit Score?

Similar to a personal credit score, there are business credit bureaus. These credit bureaus aggregate data about businesses to determine their creditworthiness. The main bureaus related to business credit are the following:

Is My Business Credit Score Important?

Yes! A business credit score allows your business to secure business loans, lines of credit, or trade accounts. Creditors or trade partners will likely access your business credit score in order to determine whether your business is creditworthy. A higher business credit score will lead to lower interest rates and better contractual terms for your business.

To learn more about business credit scores, check out the Gild Team’s article “Building Your Business Credit: A Friendly Guide to Financial Success”.

There you have it, a friendly guide to business credit and business credit scores. If you haven’t heard, Gild Insurance is the first insurance agency to leverage business insurance premiums to help build your business’ credit score. Credited by Gild Insurance uses on-time insurance premium payments to help build your business!

The content provided on this site is solely informational and does not replace legal, professional, or regulatory advice.