How Often Should You Run a Business Credit Check?

business credit check
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In the same way that an individual credit score says a lot about how creditworthy you are as a consumer, a business credit score tells vendors how safe or risky you are. That’s why it is good to conduct a business credit check regularly.

Unfortunately, because of poor cash flow management, 82% of small businesses close, and another 29% run out of cash. Knowing the financial health of your business helps to get financing if you need it. It will also help the company grow in the long run.

If you want to know how to run a business credit report and how often you should do this to keep your business flourishing, we are going to dive into those details right now. Here we go!

How to Pull My Business Credit Report

It helps to check your business credit report often so that you can see which service providers and information lenders have purchased your business credit report. A favorable business credit history helps with attaining a business loan from a business banking institution. It will also help you get good payment terms from a vendor.

What can confuse many people is that a personal credit check is not the same as a business credit check. A federal program has a requirement that the three big consumer credit bureaus allow you one free credit report each year. There is no law like this for a business credit report.

You can purchase a small business credit report through Experian, Equifax, and Dun & Bradstreet. If they don’t have a business credit report on file for you, that could be because your company has not established business credit yet.

What is a Business Credit Report?

Your business credit score and credit profile come from the information that an organization you trade with, or a bank you work with, will send to the credit bureaus who generate a business credit report. The business credit report gathers details about your business, like:

  • General company information
  • Business size
  • Industry risk
  • Payment history
  • When you opened your accounts
  • Public records like bankruptcies, liens, and judgments
  • Outstanding debts
  • Number of employees
  • Sales
  • Ownership
  • Subsidiaries

Just like a personal credit check, each bureau can have different information about your business. What is different is that a business credit score uses a different score range. Dun & Bradstreet’s PAYDEX® score has a range of one to 100.

Plus, a business credit report will use your employer identification number, kind of like how a personal credit report uses your social security number. You can collect this information by applying online from the IRS.

How Often Should I Run a Business Credit Check?

It’s good to keep a pulse on your financial health regularly. The cadence you should have for checking your business credit report depends on if you know you will request a loan soon or if you will add new suppliers or vendors. Here, check your business credit score monthly.

If you won’t be needing anything soon in terms of business finances and vendors, you could check your credit report every two to three months. Regardless of the cadence you choose, do not wait too long to check it.

Until Next Time

Now that you know what is on your business credit report, how to pull it, and when to conduct a business credit check, you’ll be in a better financially sound position to grow your business. We always give you great tips on what is new in business and finance. Visit us again soon to see the next expert advice we have for you!

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