Why Your Business Needs a Business Credit Report: Key Benefits & Who is Checking Your Score in Canada
Highlights:
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A good business credit score can help your business secure financing with more favourable terms and interest rates.
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Lenders, suppliers, service providers, and potential business partners use your business credit report to assess your creditworthiness.
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Knowing who can check your report and how it’s used is essential for managing your business’s financial reputation.
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Read Part 1: What is Business Credit?
Are you confident in what lenders see when they look at your business? Your business’s financial reputation is a powerful asset. But what exactly does this have to do with a business credit report? In this blog, we explain the top five reasons how an Equifax Business Credit Report can help your business. We cover who is checking your score and how this single document can help you secure better loan terms and mitigate operational risk.
1. The value of a business credit report
Getting your own business credit report is a valuable tool for making strategic decisions. Lenders, service providers, and potential partners in Canada use this report to assess your creditworthiness. Monitoring it regularly helps you to understand what they see, allowing you to proactively manage your business’s financial reputation.
A good business credit score can help your business:
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Secure financing with more favourable terms and lower interest rates.
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Negotiate better payment terms with vendors and suppliers.
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Attract new business partners who want to ensure your business is financially stable.
The report itself also aids in risk management decisions, such as when vetting new potential partners and suppliers. For example, you can review another business’s report to understand their financial health and mitigate potential operational risks. It also includes a Payment Index and Credit Index, which can empower you to make smarter, more accurate risk management decisions for your own business. Our Equifax Business Credit Report also contains a Commercial Delinquency Score and a Business Failure Risk Score.
2. Who is checking your business credit report (and why they need to know)
Your business credit report is publicly available and can be purchased by anyone who wants to learn about your business’s financial health. While banks and lenders are the most common users, service providers, suppliers, and potential business partners often use this information to determine if your business is a financial risk or a favourable prospective partner or customer. Knowing what your report contains and how others can access it is crucial for managing your business’s financial reputation.
3. Smarter business decisions: How business credit reports can be a tool to help you mitigate financial risk
An Equifax Business Credit Report can be a valuable tool for your own risk management decisions, improving the speed and accuracy of your risk decisions. Before you consider a large purchase order with a new supplier or ship a major customer order, you can review their business credit report to understand their bank payment history and overall financial health. This helps you know who you’re doing business with and can mitigate potential operational risks.
Apart from proactive risk management, you can also track your own financial performance by regularly reviewing your report and monitoring trends, identifying potential issues early, and ensuring your financial house is in order. You can also identify errors and fraudulent activity. Proactively reviewing your report allows you to catch and dispute inaccuracies, protecting your business from potential financial harm.
4. How business credit can affect your interest rates and loan terms
Your business credit report is a vital document that lenders may consult when assessing the financial health of your business. You can secure better deals by:
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Accessing better financing: A good business credit score can help your business secure financing with more favourable terms and lower interest rates. Lenders may use your report to predict the health of your business, which can be a key factor in their decision-making process.
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Securing supplier credit: Your business credit report can help you negotiate better payment terms with vendors and suppliers. It demonstrates that your business is a favourable prospective customer, which can lead to stronger relationships and better deals.
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Strengthening your negotiating position: With a solid credit history, you gain leverage with potential business partners in negotiations.
5. Accessing your snapshot: Where to check your Equifax business credit score
You can check your business credit scores by accessing your Equifax business credit report. As shared in What is Business Credit?, business credit scores help predict the likelihood of your business becoming severely delinquent or failing in the future.
To purchase a one-time copy, visit the Equifax Business Credit Report Direct webpage and click on ‘order now’.
You can also view a sample report to learn more about what’s in an Equifax Business Credit Report.
Read the next blog in the series: How can my business improve its Equifax Business Credit Score?