How to Safeguard Your Business Credit in a Challenging Economy

In today’s challenging economy I strongly advise my clients in my business credit practice to be diligent in protecting and, if necessary, repairing their business credit profiles.  Here are several steps that I suggest to them to ensure they’re doing that.

Use the Credit Bureaus

Some of the major business credit bureaus have online tools you can use to keep an eye on your credit. For example, Dun & Bradstreet’s eUpdate enables you to view your business credit report and edit your information all online. You can also do an online search on Corporate Experian at Smart Business Reports and then pay for your full report.

Before you can obtain a copy of your Equifax business report, you must have a business credit file which is created when a member (Business) reports the data and payment experience with your company to Business Equifax.

Once you have a file you can get a copy by contacting Business Equifax and supplying them with the member (business) name of a company that plans to pull your report. It’s always better to know firsthand what is on your file prior to applying with a lender. Keep in mind that Business Equifax will provide you a copy of your report ONLY if you supply them with a member name. 

Another option to obtain your report is if you have been declined credit based on a member pulling your Business Equifax report. You can contact Business Equifax at 1-800-727-8495

Update Your Profile

It’s important to remember that businesses must still police their own profiles to ensure that all data being reported is in fact accurate. There are currently no laws protecting business owners from unfair business credit reporting, as the Fair Credit Reporting Act does for consumers. If you discover numbers in your report that don’t match with your own business records, make sure you take action to correct it. Any inaccurate information that negatively impacts your file will require that you contact the business credit bureau and request an investigation.

For D&B call 888-814-1435 and for Corporate Experian call 888-808-8242. Small Business Equifax requires that you complete a research request form which is provided with your Equifax Business Report. Simply complete the form and submit it via fax or mail to initiate an investigation.

Pay Invoices Early

How you pay your bills and invoices weighs heavily on your business credit score. Paying on time is not enough when you’re trying to repair your business credit file. One of the best habits to adopt is to start paying your invoices sooner than the terms require. For example, paying invoices 20 days sooner than the due date can lift your paydex score from 80 to 90 points.

Add positive payment history

This can be easily accomplished if you have existing relationships with vendors or suppliers that have not reported their payment experience with you to the business credit bureaus. D&B offers a credit-builder program specifically designed to do this. For example, if you have several suppliers that have done business with you for years, imagine what this will do for your business rating when these payment experiences are added to your file.

Rebuild Your Business Credit

It is possible to rebuild a payment history even if you have bad business credit. Products like secured business credit cards are a great way to get your business credit back on track. If you have the financial means to start with a larger limit, then do so. You can expect most secured credit card companies to offer you an unsecured credit line after six to eight months of positive payment experience.

Now more than ever you need to be proactive in protecting and repairing your business credit. Do it by adopting a new level of financial preparation and vigilance.

Marco is founder of the Business Credit Insider’s Circle available at Start Business Credit.com

You may contact Marco directly at: ceo@startbusinesscredit.com

Follow Marco on Twitter @MarcoCarbajo and read more of his insights on BusinessCreditBlogger.com