Article – Credit Reports: What Small Businesses Don’t Know Can Hurt Them

Did you know that credit reporting services such as Experian, Equifax and Dun & Bradstreet often begin compiling a firm’s credit report as early as the time of incorporation? Were you aware that your business even has a credit rating? A recent article in the Wall Street Journal emphasizes how critical it is for small businesses to monitor their credit reports and to try to correct missing or erroneous data.

In these recent times of weak sales and tight bank lending, a small business’s credit rating can be extremely important because it affects the largest source of business financing—trade credit. Trade credit is typically given for 30 to 60 days, thus postponing payment for goods or services and relieving the demands on the cash flow necessary to finance sales, build inventory or pay employee salaries.

A poor credit rating can also result in higher interest rates on bank loans or an outright rejection for a loan or line of credit. Yet just one in three small business owners has checked it within the last 2 years, according to a recent survey by the Wall Street Journal and Vistage International. With missing or outdated information, or actual errors, a credit report may mark a business as more risky than it actually is, so frequent monitoring is critical.

Read more here about the importance of credit reports for small businesses.

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s