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It’s pretty easy to stumble into — nay, hard to avoid — an advertisement from some company offering you free access to your personal credit score. They’re everywhere. And the federal government has mandated that you can get a free credit report from each of the consumer credit bureaus once a year via annualcreditreport.com.

But when it comes to business credit reports and scores, be prepared to fork out some cash. There are some free services available, but they won’t necessarily give you the full picture.

You should check your business credit report for the same reasons you check your personal one: To find and fix errors (they do happen), to look for evidence of fraud and to keep an eye on what might be dragging down your business credit score. But there’s another good reason to keep an eye on your business credit: It’s public, which means your potential clients or suppliers could use it (for a fee) when making a decision whether to do business with you.

Business credit is similar to your personal credit in that it allows potential creditors to judge what kind of a credit risk your business poses. For established firms, a higher business credit score could mean you’ll have better access to loans and lines of credit, lower interest rates and cheaper insurance premiums. When you’re just starting out, you won’t have a business credit score, at least until you open a business credit card or secure a line of credit from a vendor that reports to the business credit bureaus, Experian, Equifax and Dun & Bradstreet.

Where to Get Free Reports

Dun & Bradstreet offers a free service called CreditSignal, which gives you alerts when your scores or reports change, but doesn’t give you access to the full reports themselves. Here’s what the fine print on the website says: “CreditSignal only indicates that your D&B scores and ratings have changed and alerts you when your business credit file has been purchased. To view actual scores and ratings and learn about what industries are purchasing your D&B file, we recommend that you upgrade to one of our business credit monitoring or credit building solutions.”

Credit monitoring services like Nav will give you free access to a summary of your Experian Intelliscore report and Dun & Bradstreet Paydex report when you sign up for a free account. The site says its free report “provides business credit grades for each score as well as summary reports, your personal credit score from Experian, and free tools to help you build strong business credit. (No credit card required.)”

Again, these are summaries only, as Fundera reports: “You’ll have to pay to get more out of your Nav account. But if you aren’t tracking your business credit history at all or have had bad credit in the past, receiving free business credit report summaries is a great place to start.” The site reports on a few other places to get free (at least temporary) access to reports and scores. But, again, eventually you’re going to have to pay either a fee or by ordering a subscription.

Experian offers a credit report starting at $39.95, while Dun & Bradstreet offers unlimited access to your business credit report and score starting at $149 per month.

Reading Your Credit Reports and Scores

Business credit reports show similar types of information as a personal credit report with regard to a business’ debt repayment, but they also show public records like bankruptcies and tax liens.

Here how a typical business credit report is broken down:

  • Credit: Number of trade experiences, balances outstanding, payment habits, credit utilization and trends over time
  • Public Records: Recency, frequency and dollar amounts associated with liens, judgments or bankruptcies
  • Demographic Information: Years on file, Standard Industrial Classification (SIC) code and business size

Each bureau will use this data to help generate a business credit score, which generally ranges from zero to 100. That’s different than personal FICO scores, which range from 300 to 850.

The closer your business’ credit score is to 100, the better. A score near 75 is ideal.

How to Improve Your Credit Score

If you see your business credit score and come away unimpressed, there are ways to improve it. You’ll have to mind similar behaviors as when you’re looking to improve your personal credit score.

Just as with your personal credit score, you can improve your business score by decreasing your credit utilization — pay off balances, open new lines of credit or ask for a larger credit line — and, of course, continuing to pay your bills on time, if not sooner.

Negative marks on your business report may remain in place for some time, according to Experian. Here’s the estimated length of time you have until they fall off the report:

  • Bankruptcies remain on file for 10 years after the filing date
  • Judgments for seven years after the filing date
  • Tax liens for seven years after the filing date
  • Collections remain on file for six years and nine months after the last report date
  • UCC filings for five years after the last filing date
  • Bank, government and leasing data for 36 months
  • Trade data for 36 months after the last report date
  • Credit inquiries for nine months

Mind Your Personal Credit Score, Too

While opening a business credit card can be an important way to separate your personal expenses from your business ones, your personal credit isn’t immune from taking hits because of your business activity. Some issuers report business card activity to both personal and business credit bureaus. All major issuers will check your personal credit when making a decision on your business credit card application, which could cause a small temporary drop in your personal credit score. Keep these factors in mind when you’re considering opening a business credit card.

You’ll have little to worry about — concerning either your personal or business credit score — if you pay your card bills on time every time and try to stay well below your credit limit.

Bottom Line

Keeping track of your business credit can help you ensure you have access to the best interest rates and loan options available to a business of your size and longevity. It’s an important way to keep tabs on how others see you and how you see yourself. But it requires a few more hoops to jump through than what you’ll encounter while exploring your personal credit. That doesn’t make the effort any less important.

Featured image courtesy of Getty Images.

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