Many entrepreneurs and small business owners, even those who have been in business for years don’t understand what Building Business Credit actually is. Even those who have heard of Business Credit, don’t actually know how to go about establishing a business credit file.
A PAYDEX score tells lenders how quickly your company pays its vendors and creditors. Dun and Bradstreet, the largest business credit bureau, gives this score to companies requesting your business’s credit report.
It ranges from 1 to 100 – with an 80 PAYDEX indicating your business pays it’s creditors on-time. Anything under 80 means your company pays its bills late; anything higher than 80 means it pays its bills before they’re due.
The other two major business credit bureaus, Experian and Equifax, have similar business credit scores. However, by focusing on getting a high PAYDEX score, you’ll automatically establish business credit scores with them, in time.
Having an 80+ PAYDEX is a requirement to get most business credit cards. That’s why most new and established businesses are turned-down for credit cards – because they don’t have PAYDEX scores.
It’s actually amazing how many small business owners are “running a business” but never go through the process of setting up a business properly. Any one serious about starting, growing and building a real business, needs to know how to go about setting up a company properly in order to then create a credit file and begin building Business Credit that will allow them to qualify for business financing without the use of their personal credit or social security number. It’s estimated that more than 80% of entrepreneurs know absolutely nothing about building Business Credit and how it can help them grow their business.
That’s where we come in! WorkFlow Lounge holds regular workshops to educate small business owners, entrepreneurs and those thinking about starting a business on the steps they need to take to properly set up their business and create credit files.