The majority of the total credit line used by small and medium enterprises is acquired from banks. However, much of their funding requirements are met by other sources of finance such as family and friends, personal investments, and private lenders. It can be difficult for small businesses to qualify for a loan at a bank due to the riskiness of these start-up operations, as well as their lack of tangible assets.
The higher your credit score, the better your chances of getting a business loan, although other criteria, such as your business plan, your financial statement and projections, and the type of collateral you offer are just as important.
Make sure you have this information on hand before meeting with your banker to improve your chances of getting the financing you need. A good credit score will also help you qualify for a loan at a lower interest rate.
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How do credit reports help?
It is important to regularly check your personal credit report to:
ensure it no longer lists debts that you’ve already paid
promptly request corrections should you find any errors
negotiate better terms with vendors or insurers
What kind of information does a credit report contain?
A credit report may include:
your personal identification information
your credit score
your banking information and authorized limits
a list of your credit cards, lines of credit and loans
mortgage information
your credit history
your loan repayment history
credit inquiries from lenders
total debt
debt sent to collection agencies
consumer statements
fraud alerts
public records such as judgments, bankruptcy and insolvencies
recommendations from the credit bureau
Keep in mind that credit bureaus collect and report information differently, so reports from different agencies will vary. Consider asking more than one provider for your credit report.
Free and low cost credit reports
If you need to obtain your credit report for free or a relatively small fee, consider the following providers. Most banks also offer this information to their clients for free. It’s worth asking for.
Globally there are 342 Consumer Credit Score Management companies, and here is the list of the 10 most interesting ones:
Clear Score | Provider of credit score and report to individuals
Provider of credit score and report to individuals. It provides lifetime free access to credit scores and reports to the consumer. The credit score and reports are extracted from Equifax. The company generates revenue from the commission after a consumer buys a financial product suggested by the company and is offered by a partner.
Lead Edge Capital, Tech Nation, QED Investors and 4 Other Investors [Investor Details]
CreditMantri | Credit score improvement platform and lending marketplace
Credit Mantri offers a proprietary technology to analyze credit history and helps understand credit worthiness for users. Users can access their credit scores, learn how they can improve their credit health, resolve past issues, reduce current borrowing costs and in the process discover loan products best matched to their credit profile. Borrowers can also apply for loans to 30+ lenders through its marketplace. The company also launched an alternate credit scoring platform. As of Mar 2017, the company was serving 1000 loan requests per month and had served over 1.4 million customers.
Newid Capital, IDG Capital, Quona Capital and 4 Other Investors [Investor Details]
Bonify | Credit reporting and improvement platform
Bonify is a startup that offers customers free access to their credit score and let them upload additional relevant data. The platform offer tools and personalized recommendations to the customers for credit score improvement.
Index Ventures, Ribbit Capital, DN Capital and 9 Other Investors [Investor Details]
Credit Sesame | Personal finance management and price comparison of financial products
Credit Sesame is a personal finance management tool for analyzing a person’s current debt situation and then make recommendations as to how they can make improvements. Offers complete picture of their credit, including their credit score, loans and peer comparison on the web and via a Mobile app. It offers loan comparison facility for various types of loans including home loan, student loan, personal loan, auto loan, etc. Proactively monitors market to deliver just in time alerts and product recommendations. Earns revenue by charging fee from banks after a user closes a loan. Has raised $35.4Min funding in 4 rounds.
Credit score management platform. It reports the user’s current and past rental payments for building the user’s credit score. It works directly with landlords and property managers each month to collect payment data for reporting purposes.
Totallymoney is a UK based credit comparison website that offers comparison of financial products like credit cards, loans and mortgages. The site provides links to be redirected to the provider’s website and makes money by charging commission of sold products.
Onescore is a credit score management platform. Users can check their credit scores on the platform. It also provides updates on loan and credit card history. It offers tips & suggestions to improve the credit score. It offers an app-based platform that is available for iOS and Android platforms.
TransUnion CIBIL provides credit scoring data and customer information for consumers and businesses. It collects and maintains records of an individuals and businesses payments pertaining to loans and credit cards. It enables users to manage credit score information, analyze and draw insights to create credit information reports (CIR) to evaluate and approve loan applications. It provides tools to individuals to understand their credit history and manage personal information. Its solutions include analytics and consulting which enables users to explore data, draw insights and analyze market trends. Other solutions include credit reporting, fraud and ID management and portfolio management.
HDFC, Sundaram Finance, Citicorp Finance and 17 Other Investors [Investor Details]
CreditLadder | SaaS-driven credit building platform
SaaS-driven credit building platform. Users need to provide their basic details & connect their bank account to the platform to provide read-only access. The platform verifies user’s rent payments & builds their experian credit history. Also offers deposit guarantee & credit card products to users.
Dovly is a credit score management platform. It uses an automated software program to pull the user’s credit report and shows the negative items on the report. It sends dispute messages to the credit bureaus on the user’s behalf and monitors changes in the credit report. The platform charges a monthly-based subscription.
The first step, of course, is to get a copy of your business credit report. No need to pay for it; you can get one for free from any provider and you can modify the information (within limits) either online or over the phone. We recommend doing it online. Once you have the business credit report, verify it or correct it, following these tips:
Make sure the business credit report accurately shows the business name, and any trade styles (DBA’s).
Verify the physical business address, and include your website address.
Look at the payments score in detail. Is it accurate? Does it accurately show payment promptness? If not, you can challenge an entry that shows the payment was paid later than it actually was, but you’ll have to be able to prove it.
Is ownership of the business accurately explained, and does the report properly show the business entity type (partnership, LLC, corporation), and time in business?
The business credit report allows you to add the name of the officers of the company, the title and business function, and some work experience.
It also provides for entry of the history of the company and any recent company events, such as a move to a new location, a change in ownership, etc.
You can decide whether to add financial information about the company, but remember that you will be making sometimes sensitive information available to everyone if you do so.
The business credit report will show liens, lawsuits, and loans. Make sure this information is accurate.
Conclusion
Your business credit score is crucial to your business’s financial health. A strong business credit score can help you secure a loan and keep your interest rates low. If your score isn’t as strong as it should be, lenders may say no. Or if they do say yes, they may charge you a higher interest rate, which will affect your profitability as a company. But how can you check your business credit score for free?
Our software for entrepreneurs to obtain credit report is powered with a cutting edge artificial intelligence algorithm, enabling business owners to instantly get their credit report and remain in control of their finances. Find out how our software for entrepreneurs to obtain credit report can improve your business
