Guide to Rental Property Business Credit Report

Businesses are like people in some ways. Just like us, they can receive credit reports the same way individuals do.

Like any other individual, business owners can also check their business’s credit report to see the strength of their commercial venture. The report says whether or not they are qualified for trading, credit, business financing, and other financial opportunities.

Some people might have the question, “Why do we need to have a business credit report?”

For a property management company, having a business credit report can actually make getting financing for it (say, for property improvement) much easier.

It still depends on the score in your business credit report, of course. But even if your business doesn’t have a stellar credit score, there are other reasons to get its credit report.

In today’s blog, we’ll go into detail about what you should know regarding a business credit report

Why should you get one, how can you get one, and what does it mean for your property management business?


Getting a Business Credit Report

If you’re reading this blog, you’re likely in the property management game. 

So let’s take an example of a property management company that wants to expand, to explain the importance of a business credit report.

You’ll very likely need financing to make that expansion possible. 

Some people choose to just use their personal credit reports to obtain financing for such ventures. 

Sometimes that works — but sometimes it doesn’t. That’s because many lenders will still want to look at a business credit report in addition to the personal one.

So to qualify for the business credit, you will need to have an excellent business credit report

Very few property management companies truly understand how business credit is established and tracked, though. They don’t understand either how it affects the growth of the business.

That’s what we’re going to clear up here. So, let’s dig further to understand what is a rental property business credit report…


What Is a Business Credit Report?

A business credit report is much like a personal credit report in some ways

The scores on these reports both go up when you pay bills and loans on time

On the other hand, scores go down when you’re a late payer or you accumulate a lot of outstanding debt.

The main difference is that the subject of all those actions (and the score affected by them) is an individual in a personal credit report and a business in a business credit report.

So yes, your business credit report is decidedly a different document from your personal credit report.

Business credit reports are maintained by credit management companies. Getting one is essential for checking on the financial health of a rental property business.

A business credit report can tell you a lot of things about your business.

For example, the score found on it often determines how much interest companies will pay when they get loans. It also determines the amount of credit lenders can extend.


Where to Get a Business Credit Report

A business credit report for a rental property business may be ordered from the 3 major credit bureaus for businesses:

  • Experian,
  • Dun & Bradstreet, and
  • Equifax.

Note that there’s only one difference between the list of credit bureaus that can give you a business credit report and the list of ones that can give you a personal credit report. 

That’s Dun & Bradstreet, which is replaced by TransUnion for personal credit reports. Experian and Equifax, however, are also the agencies you can go to for a personal credit report.

Now whichever agency you do approach for your business credit report, you’ll have to pay for the report. This is generally the case for business credit reports. 

That’s not the case with personal credit reports, of course. Everyone is entitled to a free personal credit report from each of the main reporting agencies each year.

So a lot of people make the mistake of assuming they’re entitled to a free business credit report each year too. That’s not the case — so keep it in mind.

Still, the fee for business credit reports is largely nominal. You won’t have to worry about having to set aside a large sum just to get one.


Experian Business Scoring and Services

The Experian Intelliscore Plus is a score granted by Experian. The score can be delivered as a standalone report or delivered as part of the regular scoring of your entire portfolio. 

Intelliscore Plus is also a premier business credit score model, providing an easy-to-use 1 to 100 percentile risk score.

(Contrast that to the usual scoring range for personal credit report scores, where 650 is usually the lowest number possible for a “good” credit score.)

Here are the Experian business services:

  • Business Information Services – It provides data and predictive information for organizations and firms to identify industry demand and opportunities. It increases profitability rate and prevents risks by doing verification of business information.
  • Decision Analytics – It’s where the data and analytics are combined to assist businesses in making informed decisions. 
  • Consumer Information Services – It provides solutions for business entities that concern customer credit lifecycles. The gathered data is intended to help businesses make smarter decisions.


TransUnion Business Products and Solutions

Dun & Bradstreet is one of the biggest companies in commercial data and analytics. Boasting over 300 million business records in its database, it offers myriad services for managing credit risk, business marketing, and sales.

Most of Dun & Bradstreet’s products are subscription-based or reliant on data reporting. They also offer some data-licensing services. For example, there’s the D&B Hoovers company as well as the D&B Data exchange. 

Equifax Business Credit Reports

Equifax provides insights into the validity, financial stability, and performance of many businesses. Some of the information provided by the report from Equifax follows:

  •         Business demographics,
  •         Trade payment history,
  •         Financial payment history,
  •         Guarantor/s and small business owner/s associated with the company, and
  •         Public records (judgments, liens, and bankruptcies).


Why Your Business Credit Report Matters

A business credit score is a lot like a personal credit score. It’s a number that represents whether lenders can trust that business to pay back a loan.

When you have a good business credit report, you will have a better chance of getting loan applications approved. 

Besides that, establishing a good business credit report score can also help you get better rates on insurance for your business. That’s because most insurers are willing to lower premiums for businesses with good credit reports.

In addition to that, getting a business credit report can help you distinguish your business’s finances from your personal finances.

That matters for tax purposes as well as for general financial management in other area (business or personal).

So in sum, your business credit score measures the credibility and trustworthiness of your business when it comes to finances. It also helps you and others get a better sense of how your business is doing, financially.

That’s what makes business credit report so important. 


Bad Credit Can Hurt Your Business

On the other hand, when you have  a bad business credit report, it will decrease your chances of loan approval for your property business. 

That means there’s a high chance that it can affect your business’s growth.

Apart from that, it affects your business’s ability to transact with suppliers and conduct operations.


Final Thoughts on Guide to Rental Property Business Credit Report

In this blog post, we talked about what it means to have a business credit report for your rental property business.

There are three commonly used institutions for a business credit report. These are Experian, Dun & Bradstreet, and Equifax. 

These three institutions provide you with information on the score of your credit report.

A property management company should be cautious when it comes to its credit score. Having a good credit score is the best way to obtain favorable financial terms and get better chances of approved loans. 

A bad credit score can hurt your property management company when you’re in dire need of financial support. Additionally, you can get several other business benefits by having a good credit score or just generally being aware of your business’s credit score.

If you have more questions about what it means to have a business credit report, don’t hesitate to leave comments below.

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