What’s Luck Have to Do With It? 5 Credit Score Myths About Your Business

A strong business credit score does not just appear at the end of the rainbow. There are a lot of myths out there.  So many so, that it can be difficult to separate reality from fiction. Don’t fall for these 5 credit score myths. 

Don’t Believe These 5 Credit Score Myths When it Comes to Your Business

Most of the confusion comes from a lack of understanding about business credit scores.  Many do not even know what it is, how you build it, or even that it exists.  Let’s take a look at each of these common 5 myths about credit scores and clear up a few things. 

5 Credit Score Myths: If You Have Business Debt, You Have a Business Credit Score

This may well be the most common of these 5 myths about credit score.  A lot of business owners have some vague idea that a credit score for their business is a thing, but they totally miss the boat on how it actually works. They know they have a personal credit score because they have personal debt. They know that their credit score depends on how well they handle that personal debt, and how much they have.  As a result, most believe business credit builds the same way. This could not be further from the truth. 

Building Business Credit

You do not automatically have a business credit profile. You have to intentionally set up your business properly to establish a business credit profile. Then, your business credit accounts do not automatically report your payments to the business credit reporting agencies. That means, you do not necessarily have accounts reporting positive payment history, even if you are handling your business credit responsibly. You have to seek out accounts that will report.

Keep your business protected with our professional business credit monitoring.

This makes building a strong business credit score a little trickier than building a strong personal credit score.  A business credit expert is a great resource to help you make sure your business is set up properly, establish your business credit profile, and find accounts that will report your on-time, consistent payments.  Don’t leave it to luck. It won’t happen.

5 Credit Score Myths: If Your Personal Credit Score is Good, You Do Not Need a Business Credit Score

Because you can get a business loan with a good personal credit score, a lot of business owners think they don’t need to worry about their business credit score.  However, there are a number of reasons to work on building a strong business credit profile regardless of your personal credit report. For example:

  • Having separate business credit keeps some business accounts from affecting your personal credit report. This can keep you from running into trouble buying a home or car if your business struggles.
  • Separate business credit opens more funding opportunities so that you can access more money for your business.
  • Even when lenders rely on your personal credit score, a strong business credit score can help you get better rates and terms than you would otherwise.

While it is possible to fund a business totally on the merits of a good personal credit history, it is not efficient or wise, and it will lower your personal credit score. 

5 Credit Score Myths: Personal Credit Score Doesn’t Affect Business Credit Score

Your business credit profile, if set up properly, is all together separate from your personal credit profile. Handled the right way, business accounts do not show up on or affect your personal credit report. However, the reverse is not necessarily true.

In some cases, your personal credit score may be used in the calculation of your business credit score.  Not only that, but it is always a consideration when it comes to the overall fundability of your business. This means that even if you have a solid business credit history, you can’t ignore your personal credit score. 

5 Credit Score Myths: You Can Monitor Business Credit for Free

It makes sense. I mean, you can get a free copy of  your business credit report. There are a ton of free apps that let you peek at your personal score throughout the year.  Why wouldn’t you be able to do this with business credit?

Keep your business protected with our professional business credit monitoring.

There are no free business credit monitoring services, though you may be able to get a peek or a sample one time for free. The business credit reporting agencies offer some options for a fee, but Credit Suite can help you monitor your business credit score for a fraction of the price.

5 Credit Score Myths: You Don’t Need Anyone to Help You Build Your Business Credit Score

Credit repair companies are abundant when it comes to personal credit. Many of them are simply trying to make a buck. It’s almost always a scam. The only sure fire way to fix your personal credit score without ending up worse off in the long run is to pay your bills consistently on-time.

This is not necessarily true when it comes to your business credit score. A business credit expert can help you in a number of ways.  They have relationships with vendors, lenders, and other knowledge that can be extremely valuable as you work to establish and build a strong business credit profile. 

Analyze Fundability

A business credit expert can help you analyze and assess the overall fundability of your business.  While it may technically be possible to do this yourself, it is a huge job. It takes a lot of time, and there are so many factors to consider it can be easy to miss something. Furthermore, it can be difficult to access some of the information.  A business credit expert will have the contacts and expertise necessary to talk to the right people at the right place to get things done.

Keep your business protected with our professional business credit monitoring.

Properly Set Up Business Foundation

As mentioned earlier, your business has to be set up properly before you can even establish a business credit profile, let alone build a business credit score.  A business credit expert can work with you to determine if your business foundation is set up as it needs to be. If not, they can help you fix that. 

Get Accounts Reporting

Even with a business credit profile, there is no credit score until you have accounts reporting. The thing is, not all business accounts report payments to the business credit reporting agencies. In fact, very few of them do.  What’s worse, is most companies do not make it clear to customers whether or not they report payments.

A business credit expert has relationships with specific vendors that they know report payments. You don’t have to rely on trial and error.  Doing that, you could go months thinking you are building your credit score and really, nothing at all is happening. Working with an expert ensures you get on the right track and head down it as quickly as possible. 

Your Business Credit Score is Not Found at the End of the Rainbow

When it comes to building strong fundability with the best business credit profile and highest business credit score possible, strategy trumps luck every time.  You have to be intentional and follow the process.  Once business owners know this, most are willing.  The problem is, it is difficult to navigate these waters alone.  Lenders and vendors do not always offer up the information needed easily.  Also, few average Joe business owners know where to look or what to look for to evaluate fundability.  This is where a business credit expert is priceless.  They have the knowledge and skills needed to speed up the process exponentially.  This not only saves time, but in the long term it also saves money. Get your free consultation with a Credit Suite business credit expert today.

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