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Monitoring your business credit

airplane30902462.jpgBusiness credit scores and reports constantly change. Identity theft and errors on your credit report will cause your credit score to significantly drop and this will hurt your chances of obtaining a loan or credit card. There is a large variety of information that goes into a business credit score like outstanding balances, past payment history, percentage of debt you are carrying, and your ability to handle your credit.

Monitoring your business credit is important to make sure your vendors are reporting the right information and to make sure that there are not errors on your credit report. Around 70 percent of credit reports have at least one error. It could be something small like a misspelled address or something big like an open account that is not yours.

Another reason to monitor your credit report is to look for inquires on your credit report. If lenders are pulling your report, you deserve to know who they are and why they are pulling it. If you did not give them permission to pull your credit report, it could be a red flag that someone is trying to open a business credit card under your company name.

Monitoring your business credit will also help you create a plan to get out of debt quicker. You can easily find out where your business strengths and weaknesses are and this will help you to develop a strategy to improve your business credit. The typical things that cause business credit scores to drop are directly related to your ability to properly manage your credit. Here are some things to do:

  • Always pay your bills on-time and try to pay off the entire balance borrowed at the end of each month.

  • Never use more than 20-30 percent of the total balance on your credit card. Carrying a high balance will demonstrate your inability to properly manage your credit and this will cause your credit score to drop.

  • Report any errors on your credit report to the major credit bureaus as soon as possible. Having an error on your credit report could be causing the score to be lower.


You can subscribe to a credit monitoring service for a low monthly fee or you can periodically monitor your credit by ordering your credit report from the major credit bureaus once a year. Experian is one of the major credit bureaus that offer credit monitoring services for a low fee. They will send you alerts whenever there is a change to your report and they will also notify you when your new credit report is ready. Using a service like Experian's is a great way to re-gain control of your business credit. They also offer additional tools like debt calculators and professional advisors that can help your business develop a strategy to reduce its debt load.

Another benefit of using a credit monitoring service is you have the ability to find out how risky some of your investments are. Many business owners automatically extend credit to all of their customers. This practice can be detrimental to your business because some of these individuals may have poor credit ratings and they could easily hurt your business credit score by not paying on their monthly bills. Businesses also have the ability to review the credit information of some of the businesses they plan to do business with. This will help you determine if that company is able to properly control their finances and if they will hurt your business.

Monitoring your business credit is important to the future growth of your company. A poor credit rating will hurt your chances of doing business with investors that may be interested in helping your company expand.

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