This post was originally published on On Deck
Establishing and building business credit is critical for the growth and sustainability of any business, whether it’s an early-stage startup or seasoned corporation. Just like individuals rely on personal credit scores, businesses also have credit profiles that lenders, suppliers and other stakeholders scrutinize to assess financial health and credibility.
This guide will help you learn how to establish business credit, and provide you with actionable steps to navigate this important aspect of business finance.
What is business credit?
Business credit is a measure of a company’s creditworthiness and ability to meet financial obligations. Similar to personal credit, business credit reflects a business’s history of borrowing and repayment.
Consistently paying bills on time, avoiding defaults and maintaining a solid credit profile can help your business grow without relying on your personal credit history.
Having a good business credit score can also help your business secure more favorable financing options, such as lower interest rates, higher credit limits and flexible payment terms.
Credit bureaus such as Equifax, Experian, and Dun & Bradstreet evaluate your business credit based on factors like payment history, outstanding debts and trade relationships.
Key metrics like Dun & Bradstreet’s PAYDEX® score are specifically used by lenders and suppliers
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