Corporate Credit

Corporate credit is similar to personal credit only it refers to the credit history and profile associated with the corporation or business. It is often referred to as business credit as well. Corporate credit is extremely important for a business in order to establish relationships with vendors, banks, potential creditors, business partnerships, and clients. This credit is used by others to determine how reliable your company is and helps them to determine if they want to pursue a relationship with you. Establishing and maintaining positive business credit is important to the longevity of your business. It plays a major role in how the rest of the business world evaluates or views your company.

Keeping your personal and business credit histories separate is important. By allowing the two to intermingle you put your personal assets and finances at risk if things were to go badly for the business. It also sends a mixed message to other businesses. It might send the message that your business is unable to stand on its own two feet.

Your corporate credit is determined by several factors. One of the major factors is your company's assets. This helps to determine what your company is actually worth. Another factor is ability to pay or repay any loans. It looks at your history of payments and checks to see if they were timely and were the payments reliable. They look to see how much debt is currently outstanding and your ability to pay that off. Finally, they look at the company's acumen. How long have you been in business, are you in a declining or growing industry? They look to see your ability to stay in business.

Credit histories are determined by several independent credit agencies. Each uses a differing method of establishing a credit score. Some of the most well known credit agencies include but are not limited to Experian, Dunn and Bradstreet (D&B), Equifax, and Business Credit USA. Credit scores can be rated as a numerical score or by a letter grade. It depends upon the agency itself.

If you want your corporate credit to be the best it can be you need to make sure that you manage your debt appropriately. You need to make sure that any debt owed is paid on time and reliably. You also want to make sure that the ratio of debt to income is appropriately balanced. Experts are available to help if you need them.