While it may already be common knowledge to know one’s personal credit score, it does not know your business credit score (yes, this is a thing). The sad truth is that many small business owners in Australia ignore business credit scores when they actually shouldn’t. This score, which does not include any business owner’s personal information, will solely rely on your business’s credit file.
Like many other business owners who don’t see the value of knowing your business credit score, this article is for you. If it is the first time you hear about this, this blog post is meant to be an eye-opener to help you see the value of seeking advice from a broker to get an idea of where your business stands on this matter.
Why It Is Important to Know Your Business Credit Score
Your business credit score may be anywhere from 0 to 1200, depending on how good or bad your standing is. If you have a growing business with increasing needs, you may need to take out business loans or get a business mortgage to buy new property. Knowing your business credit score will allow you to actively take steps to improve your credit score and give better chances to your business to get approved for future loans to support growth.
Factors That Affect Business Credit Scores
If you fall in the 93% of business owners who do not know their business credit score, some of the most common factors affect this score.
1 - Time in Operation
The credit score of a well-established business that had been around for longer will likely be higher—provided that the company has made it a priority to pay back any past loans that they had taken out and have maintained their good standing.
2 - Credit Enquiries
The type of credit that a business has been sing over its years of operation will come into play when its credit score is being determined.
3 - Company Details
Specific details about the business, such as its number of employees, business type, address, company structure, and even its legal entity name may play a part in how credit scores are calculated.
4 - Publicly Available Information
Information on the public record, such as legal cases, lawsuits, or delinquent taxes, will also be looked into. Generally, a business free from any legal trouble will have a higher credit score than businesses that have gotten into trouble with the law.
5 - Commercial Credit Information
If the business has defaulted on some loans in the past or has had any negative credit information, these will adversely affect the credit score of the company.
Now that you know that your business has a credit score, it is paramount that you maintain an optimal score. A good credit score will allow your business to take out loans whenever necessary. Making sure that you pay existing debts on time, avoid legal trouble, and keep in touch with your creditors will ensure that your business has a good credit score.
If you are looking to get business loans, especially mortgages, to acquire new property for your business, come to Wealthy You! We are an Australian Mortgage Company servicing Sydney for almost a decade. Because of this, we can offer you a variety of mortgage solutions to meet
your specific financial needs. As an alternative lending specialist, we make refinancing
your home simple. Whether you are looking for business mortgages or alternative business funding, we will try our best to help you! Call (02) 7900-3288 today!