What is a Business Credit Check and Do I Have To Pay For Them?

what is a business credit check

You have heard about business credit checks in the course of doing your business, a lot of myths and truths have been dished out to you.

Business credit checks are important to a company. It is the necessary factor that loan companies and institutions check to determine if your business is creditworthy and how much they can risk with your business. 

About 90% of businesses do not do business credit checks, they rather apply for loans blindly. This figure shows that a lot of businesses are not taking advantage of this. You cannot boost your business credit score intentionally when you do not even know what your credit score is.

The bulk of the problem is that many people’s orientation about credit scores is that it is only reserved for individuals. Businesses also get credit scores.

What is a business credit check? 

It is the act of checking the business credit score of a business. 

Business credit scores take into account the ability of the business to repay loans. For business credit scores, we use the range from 0 to 100, 0 as the lowest ebb, and 100 as the highest ebb.

Comparing your credit score and business credit score is a futile exercise because of the different measures used to calculate them. The range for business credit scores is 0 to 100 and the range for personal credit scores is 300 to 850.

The personal credit score and business credit score have similarities and differences. They are similar because creditors use their credit history to determine their creditworthiness. They are different because the personal credit score uses a lot of personal information to determine while the business credit score uses a lot of business information to determine.

Small business owners can build good credit scores and use it to scale up their businesses. Businesses need to have access to their business credit scores and reports. It is also important to know what makes up a good business credit report and what makes up a bad business credit report.

In calculating a business credit report for your business, credit agencies use the following index found on the company file: history of loan payment, age of credit payment, company directors information, the debt factor, the risk associated with the business you want to check, company details, information on public records and the size of the company.

The best way to increase your business credit scores is to acquire loans and payback on time. Prompt long repayment does wonders to your business credit score while defaulting on payment reduces your business credit score. Credit companies access these business credit reports to determine how much they can borrow you.

Creditors most times exclusively use loan repayment history as the sole or most important factor in granting credits to businesses.

There are a lot of business credit agencies that offer business credit reports for the business. Some of these agencies include Experian, Dun and Bradstreet, and Equifax. 

These established business credit reporting agencies do not typically offer free credit reports and checks for businesses. They charge a fee for their services. Some have free business credit check services but they are limited in scope and the result you can get. If you want a thorough and detailed business credit score report, it is worth it to pay with these major report agencies.

There are a number of few sources you can use to get free business credit checks. To help you get a headstart with your business credit reports, we have collected some free credit report sources you can use to get your business credit report for free at any time.

  1. Nav

Nav offers free business credit reports. It shows you how creditors view your business credit score and suggest loan options your business qualifies for. Nav is a fairly accurate resource to use to get a good business credit report for your business. If you are looking for just the basics and not a deep search, Nav is a good place to meet your needs.

Nav offers one of the best free services for checking business credit reports. You get a summary of business credit reports from other business credit check resources such as Experian, Dub and Bradstreet, and Equifax. You will also get information about your business credit scores such as different grade scores that are vital in building your business credit scores. If you need a budget-friendly (free) resource to help you build your business credit rating, Nav is a good pick.

While Nav offers so much for free, it will not give you the full report with the free version. If you want the full report on Nav, all you have to do is to upgrade to the paid subscription plan with the cheapest rate set at $29.99. This is cheap in contrast to other business credit check resources. 

  1. Dun and Bradstreet

This resource was mentioned earlier as a paid source. It has a paid option and a free option, the paid option offering full access to business credit scores and reports.

The free version offers some qualities that are useful for business owners. When you register with this resource, you get the following benefits:  free alerts when your credit ratings and scores rise or fall, you get a monthly report of all the activities that affect your credit score and ratings,  and it will also show you how often you access your business credit report.

This free version will not offer you a full business credit report for your business. The cheapest plan you can upgrade to is the CreditBuilder Plus which is priced at $149 monthly. 

Business credit checks help businesses build their credit scores. It helps you know what loans you can access and the ones you cannot. If you want a comprehensive full business check report, you will have to pay to receive such services. While there are free resources you can use to do your business check, they are limited and with restrictions in the information and services they offer. 

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