Credit agencies play an important role in making decisions with regards as to who would be qualified for low-interest loans. These are also used by investors to make decisions on which businesses should they support. Thus, you should be aware on the performance of your credit rating. This is one important aspect because of the following reasons:
To notice inaccuracies
Checking your credit report will enable you to notice some inaccuracies on your record so that you may immediately take some actions to correct it. The inaccuracies that are found in credit reports may be due to a variety of factors. This may include accidental listing of accounts twice in your account history. Simple errors such as this could lower your score twice as much as it should. Other possible reasons for inaccuracies may be due to another’s business activity.
Aside from this, you are also liable for the following common errors:
- Debts that are being recorded under your name even if they are not yours
- Good credit information that is omitted from your record.
- Your report is not updated and there are outdated entries which are still part of the report.
- Negative credit information of other businesses especially if you have the same business names
- Inaccurate record of payment in which payments are being recorded as late even if you have paid on time.
To prevent fraud
Identity theft also occurs for businesses and not just to individuals. It is possible that a person could spend your money without ever repaying it if someone opens a credit card in your name. Thus, it is important to monitor and to conduct a credit check regularly. There may be some people who may take advantage of the vulnerability of your credit account especially if it is not well-secured and protected. You must take time to check your business credit report to monitor any suspicious transactions.
Build a better credit history
Monitoring your credit report would not only help prevent fraud or inaccuracies in your report but it could also aid you in building an improved credit history. You must be aware of your activities in order for you to determine the possible reasons for your scores to fall so that you would be able to fix your credit health. Check your business credit regularly to ensure that you do not fall into a bad credit rating. Be aware of your actions and transactions to keep a good credit performance.
Get the credit you deserve
By having a good credit profile, you are allowed to get the money that you will need to grow your business, continue to pay for your inventories, be able to purchase equipment among others. By performing a credit check, monitoring your credit profile and keeping your debt low, you are more likely to obtain a good loan at a reasonable rate in the future.
Amy Johnson is an active blogger who is fond of sharing interesting finance related articles to encourage people to manage and protect their finances. She also covers topics on how to prevent credit card fraud and how identity theft monitoring helps in preventing identity theft.
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Category: Startup Advice