Business Credit Report

How to Review Your Business Credit Report | SMB Compass

Ezra Cabrera | September 17, 2019


    Your business credit report compiles all the information needed to assess your company’s creditworthiness. It outlines your business structure, industry, historical financial performance, and payment history; thus it is important to know how to check your business credit. While your vendors, creditors, banks, and lenders can’t view your credit reports, they can check your business credit reports at any time without your permission. For this reason, you’ll need to make sure that everything in it is updated and completely accurate. This is especially true if you’re applying for fast business loans, making purchases, or entering into leases.

    The question now is how do you check your business credit. Dun & Bradstreet, Experian, and Equifax are the primary business reporting agencies responsible for issuing business credit reports. Aside from pulling each one’s credit report of your business, you’ll need to review them to ensure accuracy as well. If you’re clueless about deciphering your business credit report, now’s a good time to change that.. Now that the question of how do you check your business credit has been answered,

    here’s what you can expect to see in your business credit report.

    1. The Profile of Your Business

    The first thing that typically shows up on your business credit report is your business profile. It contains your business’ legal name, trade name, your headquarters’ address, and your business’ years in operation. This section may also feature additional information about companies that your business has legal responsibilities for or affiliation with.

    Furthermore, creditors will check your incorporation details and the number of employees to determine the size and history of your company. The report will also include your income statements, annual sales, profits, and other financial data.

    2. SIC and NAICS Industry Codes

    Your business credit report will also indicate your SIC (Standard Industrial Classification) and NAICS (North American Industrial Classification System) codes. Both codes define the primary industry that your company belongs to. Since industries have varying levels of risks, wrong codes will get you declined for credit. You’ll need to diversify your business activities if your company belongs to industries that are considered high-risk. The industries that SIC classifications identify as high-risk include the following:

    • Adult entertainment
    • Car sales,
    • Dry cleaners
    • Money lending and/or collecting
    • Real estate investing
    • Restaurants
    • Travel or transportation industry

    You’ll need to contact the agency and update your business profile on their website if your business is misclassified. Other than that, be sure you correctly identify your business on your responses to Census surveys or administrative records. This is important since SIC and NAIC use public record data as a basis for the identification of your industry code.

    3. Trade Payment History

    Recent payments made to suppliers for the past 3 years will be recorded in your business credit report. Included with each payment are the dates of sale and payment, amount, and payment terms. Furthermore, your seasonal payment trends can also be viewed. Direct comments from vendors and your payment activity will be valuable to future sellers. This data will help them decide if they want to work with you.

    4. Commercial Financial History

    Your report will also reflect your payments on fast business loans, business insurance, and equipment leases. Don’t be surprised if the details of your financing activities will show up here as well. This includes the amount you received from lenders, term of the loan, types of financial product, original balance, and remaining balance. Most lenders will check on this section when they’re assessing your application for fast business loans.

    Related: 5 Reasons Why Your Business Loan Application Was Rejected

    5. Legal Filings, Bankruptcies, and Collections

    This section gives a clear picture of your company’s overall financial health as well as liquidity. It shows UCC filings for the past five years. This includes liens placed on business assets that serve as collateral on a loan.

    Moreover, your business credit report will also show other legal findings. This includes accounts placed into collections, tax liens, and business bankruptcy judgments after they’re 90 days delinquent. Keep in mind that your overdue accounts and legal judgments against you imply financial distress. This can seriously affect your company’s creditworthiness.

    6. Business Credit Score

    Knowing how to check your business credit is essential as the information in your business credit report will be used by each business credit agency to issue your business a score. This score predicts your payment behavior. Essentially, business scores typically range from 0-100. However, what counts as a good score is highly dependent on the credit ranges each bureau uses.

    Check Your Credit Report Before Applying for Fast Business Loans

    Keep in mind that your company’s ability to pay its debts is a key factor inside your business credit report. Credit bureaus can sometimes make mistakes on your credit report, too, so be sure to check that, as well. If you’ve been thinking about applying for fast business loans, you need to have a good credit background to qualify. So if you spot some problems, call the credit bureaus immediately to resolve the issue. Be sure to check your credit report beforehand if applying for loans to determine whether your business qualifies or not.

    Related: 8 Things You Need to Do Before Applying for Small Business Loans

    About the Author

    Ezra Neiel Cabrera has a bachelor’s degree in Business Administration with a major in Entrepreneurial Marketing. Over the last 3 years, she has been writing business-centric articles to help small business owners grow and expand. Ezra mainly writes for SMB Compass, but you can find some of her work in All Business, Small Biz Daily, LaunchHouse, Marketing2Business, and Clutch, among others. When she’s not writing, you’ll find her in bed eating cookies and binge-watching Netflix.