How Do Lenders Read Your Business Credit History?

When applying for business credit, the bank or vendor will usually check your business credit history. Your potential creditor will probably request a copy of your business credit profile and report from one or all of the three major business credit reporting agencies: Dun & Bradstreet, Equifax or Experian. The creditor will almost always base their decision to approve or deny your credit request based on the information contained in your business credit report.

How Credit Profiles are Evaluated

Most creditors will look at several key factors in your credit profile. They will consider the number of open trade lines, the high and low average credit amounts and payment histories for each of the trade lines. Depending upon the amount of the line of credit or loan that you're applying for, the creditor's decision to approve or deny your loan will be based completely off of these factors.

The creditor will use information about your past payment performance to determine if you are likely to make timely payments in the future. Companies that have previously extended credit to your company have more than likely reported the credit line and your payment history to one of the credit reporting companies. Therefore, you should always be aware of what's contained in your business credit profile - before applying for a credit line or loan.