The answer for “How to Check Credit Score” is different for business credit than for personal credit. Most everyone realizes you can check your personal credit score for free. There are dozens of websites that let you do so. In fact, for personal credit you can get a free annual credit report. It’s easy to check credit score for personal credit. However, many do not realize it isn’t so easy to get your hands on your business credit score. Is there even a way to check business credit score for free?
Is There a Way to See Your Business Credit Score for Free?
The truth is, there isn’t currently a way to check business credit score for free on a regular basis. There is no way to monitor business credit score progress for free. There are, however, a couple of ways to get a snapshot view of what your business credit score is without paying. After that, you can take steps to ensure it either stays strong, or start building a stronger score.
How to Check Business Credit Score for Free
Here is a list of business credit monitoring programs that offer trials or a one-time “peek” at your business credit score for free.
This is a service that will allow you to see a summary of your credit reports from all three of the major credit reporting agencies. These are only summaries, not full reports. Generally, that means you can see your score, and maybe the accounts you have listed. This will help you see where you stand. Still, it will not suffice for the purpose of correcting mistakes.
You really won’t even be able to see what you need to do to improve your score. If you want more info however, you can pay for it.
This company does not offer ongoing free business credit reports. However, you can access a free trial. The best part about this one is, there is no credit card required. After you pull the report, you have 30 days to view it. This is a great option because there is no fear of missing a cancelation deadline and having to pay anyway.
Scorely is a lesser known credit reporting agency. It will let you see your credit report for free before you pay for a subscription. In contrast to Nav or Credit.net, they calculate their own score. In this way, they are similar to the big 3 (Experian, Equifax, and Dun & Bradstreet.)
This is another that requires you to pay for an ongoing subscription. Yet, they will give you a free credit report to get you started. If you do subscribe, they have a number of reports that are unique to them.
This means you are getting something that you may not get with the other monitoring services or even the standard reports from the Dun & Bradstreet, Experian, or Equifax. Like Scorely, these reports are from CreditSafe directly and not related to reports you would receive from Experian, Equifax, or Dun & Bradstreet.
Business Loan Denial
If a lender denies you for a business loan based on your business credit, you can get a free copy of the business credit report used by the lender to make that decision. Of course, this is not a fun way to see your business credit score for free. After the decision to deny, you will get a letter in the mail from the agency that provided the lender with your report.
You will be able to request a free copy of the report that the lender saw. Then, you can see why the result was denial. You have 90 days to submit your request.
Life After a Free Credit Score Check
Now, suppose you get your sneak peek and you do get to check business credit score for free once. What then? If it’s good, you just have to keep it that way. However, what if it isn’t great? A free look doesn’t really do a lot to help you in that department. This is why regular business credit monitoring is really worth paying for.
However, regardless of how you figure out your business credit score, if it is bad or non-existent you need a plan. Here are 3 common issues that pop up in relation to fundability, and how to fix them.
#1-Business Accounts Reporting to Personal Credit
It doesn’t matter how consistently you pay your business accounts on time, if they are reporting to your personal credit report, you are not building business credit. This means you will not even have a business credit score. If you do, it will not be as strong as it could be because it doesn’t include all the accounts.
There are a few reasons why this could be happening.
Your Business Does Not Have Its Own Contact Information
Your contact information is one of many things that connects your personal credit report to you as an individual. Think about it. Have you ever had to answer questions about past addresses or something similar when applying for credit? It’s one way they check identity.
If you and your business share the same address and phone number, your payments on business accounts are going to report to your personal credit report, not a business credit report. Now, there is a chance it could report to both, but you don’t want that either. Business expenses are high, and using personal credit to fund them can cause your debt-to-credit ratio to be high.
That, in turn, can drastically lower your personal credit score. There is no need for this to happen.
On the contrary, you can get a business phone number easily that will work over the internet instead of phone lines. In fact, the phone number will forward to any phone you want it too so you can just use your personal cell phone or landline. When someone calls your business number it will ring straight to you.
A virtual office is a great way to get a separate business address without having to have a whole separate location. This is a business that offers a physical address for a fee, and sometimes they even offer mail service and live receptionist services. In addition, there are some that offer meeting spaces for those times you may need to meet a client or customer in person.
You Don’t Have an EIN
An EIN is a number that works for your business the same way your SSN works for you as an individual. Your SSN links to your personal credit report as well, so if you use it to apply for credit, even in your business name, that account will report to your personal credit report. Get an EIN for free on the IRS website.
Your Business Isn’t Incorporated
Incorporating is a huge step in separating your business from yourself. That is really the only way to establish your business as an entity in and of itself that has its own credit. It doesn’t really matter for credit purposes if you form an S-corp, LLC, or corporation. That will depend on your budget and needs for liability protection. Check with your attorney or tax preparer to determine which option is best for you.
#2 Can’t Get Approval for Accounts that Report to Business Credit
The next issue that many have with building business credit is that it is seemingly impossible to get credit without first having credit. How do you ever get accounts reporting and build strong business credit if you do not have the business credit score they want to see to get approval?
There are a couple of things that can help with this. The first is vendor credit from starter vendors. This term refers to vendors that will extend net terms on invoices without a credit check. Then, when you pay the invoice, they will report that payment to at least one of the business credit reporting agencies.
Once enough of these types of accounts are reporting, you should be able to get approval from basic store credit, and then you can build from there.
The other way to remedy this issue is to apply for the Credit Line Hybrid. This is an unsecured line of credit. You need to have good personal credit, but if you apply in your business name and your business is set up properly, it will report to some of the business credit reporting agencies.
If you do not have a personal credit score of at least 685, then you can take on a credit partner that does. You will still get the benefits of the payments being reported to your business’s credit report.
#3 Bank Declines Due to Fraud Concerns
Chances are, if this is the reason you are denied, you will never know it. That is of course, unless you do get to check business credit score for free and it’s fine. Then you will know your business credit score was not the reason for denial. You can be denied for fraud concerns even if you have excellent business credit. The problem occurs when fraud warning flags start flying up.
Scammers are running rampant these days, and lenders aren’t looking to get duped. Even seemingly small inconsistencies can lead to denial.
For example, if your business name isn’t listed the same everywhere, you very well may be denied. Like, if you use an ampersand on your incorporation paperwork, but you use the word “and” on your business website, that very well could block your approval.
The same is true for your business address. If you move to a new location and forget to change the address on insurance documents, you could end up with a denial. All business information has to be consistent across the board.
Can You Check Business Credit Score for Free?
The answer to this question is essentially yes, sort of. You can check business credit score for free at least once, or more than once if you switch up the service you use. However, you cannot consistently monitor your credit score without paying. It can’t hurt to see what’s happening, but it is only a snapshot. It is typically worth the money to pay for an on-going monitoring service.
That said, if you understand the reasons why you may be denied, you can make sure you shore up the banks and eliminate those reasons. This includes setting up your business so that business credit accounts report to business credit and not personal credit. It also means doing what needs to be done to get accounts reporting, and ensuring your business information is consistently the same everywhere.