Online Credit Monitoring
June 20, 2016
The advantages that small businesses get by being able to check an online credit rating are many.
Businesses trying to get credit, are actively preparing, or thinking about obtaining financing, as well as those that are looking to manage risk, should take advantage of online credit monitoring.
Prepare For Success
Credit monitoring is one of the most powerful tools that small businesses have. In terms of self-monitoring, online tools help businesses:
Review the credit file for accuracy
Stay on top of changes to the credit file which may impact the ability to get capital
Create a strategy to build, maintain, or improve a credit score
Learn who is running inquiries on the company
Protect against identity theft
Credit monitoring is great for assessing external businesses too. Some businesses make the mistake of quickly checking another’s online credit rating, for instance, and then falsely assuming that the other company will never experience difficulties. Credit monitoring helps:
Check and monitor current relationships
Determine if a company is experiencing financial trouble
Diversify supplier relationships if existing suppliers are becoming unreliable
Avoid financial conflicts by identifying problems early on
Reading Into A Rating
An online credit rating reveals a lot about a company. It is primarily a measure of risk. Companies with lower credit scores are generally riskier compared with those that have high credit scores.
The purpose of the credit score is to provide businesses with a way to quickly assess the reliability of another company.
Of course, there is a lot more information in a credit report than just the credit score. The credit profile details a wide range of information and data about a business.
Most of that information is then inputted into a model to determine the company’s credit score. Credit monitoring allows small businesses the opportunity to assess, not only the credit rating, but all the other information that goes into the calculation.