Credit Scores Explained
At the heart of every business decision is the worry that it is the right one. Credit score checks of your clients and business associates can mitigate against financial risk. It’s important to know that whoever you’re working with, has a solid and reliable reputation. You need to ensure that you will be paid for projects, it’s the lifeblood of your business. This has never been more important nowadays, when it seems that many companies are struggling to stay in the black.
Credit Scores for Potential Clients
Nowadays there are various online providers that can check the credit score and financial history of potential clients. These services are generally cost-effective or free and provide accurate and up-to-date information to allow you to make the right choice. With this information, it’s possible to recognise and react to financial risk and set up the correct payment terms with your clients. This will have an effect upon your cash flow and hopefully create for more liquidity in your company.
Credit Scores for Your Businesses
If you’re starting a new business and are applying for a loan, the bank or lending institution will run a credit report to obtain your credit score. A business credit score is based upon the company’s financial history. It is possible to obtain a preliminary credit score for your own company from various online providers. Obtaining your own credit score comes in handy, as it contains all of the information that suppliers and lenders can see. You can then see any potential errors that can be rectified. You can view areas that could be improved upon before applying for a loan. This is an important and powerful tool for new and established businesses. For clarity and peace of mind, it’s highly recommended.