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A Quick Guide to Business Credit

Updated: Jul 11, 2023

Make better-informed financial decisions with greater confidence through affordable, online access to objective credit reporting tools. Monitor your own business credit as well as suppliers, customers and potential investors to minimize risk and maximize profits.


The power of credit scoring

Credit scoring is a statistical approach for determining the level of risk involved when extending someone credit and his or her ability and willingness to repay. In a business-to-business environment, monitoring prospective customers’ Credit Ranking Score will reveal whether they are a high or low repayment risk. Credit Ranking Score is determined through a statistically derived algorithm that determines risk based on multiple factors:

Learn more about the types and value of data available to you for making better-informed financial decisions by viewing sample report formats:

  • Number of trade experiences, balances outstanding, payment habits, credit utilization, trends over time

  • Status, recency, frequency and dollar amounts of any applicable liens, judgments, or bankruptcies

  • Years in business, Standard Industrial Classification/North American Industrial Classification System code, size of business and other demographic data

Why credit reporting?

Objective, accurate credit reporting provides access to critical information needed for making informed financial business decisions about who you do business with and at what price. The information below presents what data might be available and how it helps:


10 great reasons to access credit reports

Knowledge is power and there are many reasons why you want to have power when it comes to credit reporting:

  1. Monitor your credit report to manage what decisions others will make about your payment terms, credit line, interest rates, insurance premiums, and investor relations

  2. Know who you're doing business with before you extend credit to maximize the likelihood of repayment

  3. Avoid the hassle and cost of collection procedures

  4. Ensure key suppliers will be around to continue supplying reliably

  5. Minimize risk with credit report monitoring services

  6. Schedule five more key accounts for routine monitoring to remain abreast of problematic developments

  7. Stay on top of what your competitors are doing by monitoring their credit

  8. Take advantage of comprehensive, up-to-date, real-time access to credit data through your Web browser — no hardware, software or technical know-how required

  9. Convenient, secure, online member sign-up

  10. Flexible credit reporting offers flexible solutions for supporting small-business financial decisions


We help small business

Why monitor your credit?

Your business credit is the basis for decisions other businesses make about you. By using a convenient, online credit reporting service, you can make sure that data about your business is accurate, which will enable the following financial decisions:

  • How much credit a supplier will extend to you

  • What interest rates you will pay

  • How much money lending institutions will loan you

  • How your customers view you

  • What your insurance premiums will be

  • The level of potential investor interest

Minimizing business risk

Checking the credit status of key business relationships is easy, affordable and convenient using an online credit reporting service. There are no hardware or software requirements, access is through your Web browser. Examine report content such as:

  • Learning if a key supplier is planning to go out of business

  • Knowing when a key account is behind on payments

  • Discovering if your own credit report contains errors that can negatively affect your cash flow position

How credit reporting saves money

By reviewing public records and other business information, companies save every year on the costs of acquiring new business and managing liability and potential fraud. Reviewing public records and other business information also establishes sound business relationships that can extend for years.


Timely credit updates

Receive timely credit report updates via email to support early detection of a customer's negative payment trends. With sufficient warning, you can proactively protect your business from customers, suppliers, or subcontractors who may be suffering financial or legal trouble.


Correcting credit errors When choosing a credit reporting service provider, be sure to learn what level of assistance the company provides in helping to correct credit reporting errors as well as other services. Experian supports its customers with the following error request process: If you believe that your company’s Experian report contains inaccurate or outdated information, you can initiate an update to your company details by using Experian’s www.BusinessCreditFacts.com/update website. Owners or officers of a business who are reviewing or monitoring their own report will conveniently find a "Submit data dispute" function at the bottom of their online company report.


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Who benefits

Anyone making financial decisions relating to how a business operates can benefit from using a credit reporting service. Below are examples of industries and types of job titles that apply:




Industries Job Titles

Construction CEO/President

Legal Partner/Principal/Owner

Manufacturing VP of Finance/Controller

Property Management Accounts Receivable Manager

Real estate Credit manager/Buyer

Retail Accountant/Auditor

Transportation Administrator


Credit terminologies

Knowing some of the basic terms associated with credit reporting will help you to make smart credit management decisions.


Establishing business credit can be the key to growing your company

ou may think that business credit has limited application for your business — that it matters only when you’re trying to secure financing. In reality, business credit is a powerful tool that can help you save money, establish valuable commercial relationships, and, ultimately, grow your business.


That said, business credit may not be easy to understand, and establishing it can be difficult. The goal of this guide is to demystify the topic and provide clear, concise advice on how to develop business credit that works harder for your business over the long haul.


Take a minute to check out our Working Capital funding options and talk to a Funding Consultant today. Ready to get a quote?



ROC Financial Solutions


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