As a business owner, one of the things you should be interested about is your Paydex score. Do you clearly understand what a Paydex Score is? What role does it play in building your business credit? How can you build up an excellent business credit?
Understanding Your Business Credit Paydex Score
Paydex is a system developed by Dun and Bradstreet (D&B) - the leading credit reporting agency in the US. The Paydex Score is used to calculate a business’s credit history in terms of figures. For individuals, it is the equivalent of the FICO score. However, the Paydex system is only applicable for business entities.
Once you’ve registered with D&B, you also begin building your business’s credit history. Nevertheless, take note that not all lenders and merchants report to D&B. Thus, it is important to make sure that the lender or supplier you’re dealing with reports your payments to the credit bureaus.
Included in your business credit report would be your Paydex Score. This scoring system ranges from 0 to 100, with 90-100 considered as an excellent rating. A score of 80 and below is considered as good while a score of 70 and below indicates bad credit.
Obviously, a higher Paydex score would give a business the advantage of qualifying for loans or accounts that require excellent credit. Banks, lending companies, suppliers, merchants and investors all rely heavily on your business credit history when it comes to closing deals. Therefore, every business owner must be concerned about raising his business credit rating.
How to Raise Your Paydex Score
What factors affect your Paydex Score? Just like with your personal credit report, the timeliness of your payment plays a big role in building your business credit. If current funds aren’t enough to cover all your debts from different creditors, try to pay off your largest debts first to avoid incurring high interest rates and penalty charges. One or two late payments may not create a big damage to your score but constant late payments would certainly hurt your business credit.
What if it’s not possible for you to meet your payment due date because of a financial crisis? In this situation, the best thing to do is to contact your creditor right away and ask for an extension of your payment deadline. Explain your situation to your lender and ask for some adjustment in your payment terms. Most lenders would be willing to do so especially if your records show that you’ve been a good and trusted customer in the past.
The types of credit you have are also determining factors in attaining a high Paydex score. Acquiring a business loan or a business credit card can be great tools in building business credit. Remember, to build an excellent credit, you should make it a point to stay within your given credit limit and to submit your payments on time at all times.
Reviewing your business credit report from time to time is also advised. In case you may have some issues with the information contained in your report, you may contact D&B and request for an investigation.
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Thursday, August 27, 2009
Monday, August 17, 2009
Building Your Business Credit through a Secured Credit Card
A business with no credit history or with a bad credit history can definitely benefit from a secured credit card. In this article, let’s talk about the basics of secured business credit cards and how it can help you establish or rebuild your business credit. Hopefully, by the end of this article, you can consider a secured credit card as one of the ways to finance your business.
Basic Details about Secured Business Credit Cards
As we’ve said, secured business credit cards are especially provided for companies with bad credit or no credit. What are the requirements you need in order to get approved for a secured business credit card account?
First, an entrepreneur must open a savings account and maintain the minimum required balance in his account. This is called a security deposit which would be used by the bank in case the account holder fails to pay off his credit card balances. For this reason, the amount of security deposited often determines the credit limit that would be given to the account holder.
If you placed a large amount in your security deposit, then you can enjoy a higher credit limit. On the other hand, if you can only afford a few hundred dollars as security, your credit line would most likely be low. Nevertheless, you can expect a guaranteed approval of your application regardless of the status of your credit.
How It Can Help Your Small Business
If you currently have a bad credit history, you may not qualify for business credit cards with the best deals. Still, you don’t have to suffer from bad credit forever. In fact, as soon as you get approved for a secured business credit card, you can immediately start working on improving your credit. How?
One important thing to remember is to be consistent with your payments. If you’re really serious about raising your credit, you need to be conscious about submitting your payments on time. Don’t forget that a single delay or miss can easily pull down your credit score. It is also crucial to pay attention to your spending and to stay within your given credit limit.
You may need to wait at least six months to a year before you can see an improvement in your credit history. Needless to say, by managing your secured business credit card correctly, you can be sure that you’ll be enjoying excellent credit history soon.
What to Expect About A Secured Business Credit Card
You may find that secured business credit cards have higher interest rates and fees compared to credit cards that require good to excellent credit. Understandably, because of the risk involved, credit card companies charge higher fees for their services. Still, this doesn’t mean that you should settle for unreasonable charges.
If you need a secured credit card for your small business, you need to be willing to spend time and effort in exploring the market to search for the right one. Read credit card reviews and compare each one more accurately by reading the fine print. Find a secured credit card that regularly reports your payments to the credit bureaus so that your credit history can be updated right away. Lastly, after improving your credit, request for an upgrade to a non-secured business credit card account.
Credit Cards Resources
Basic Details about Secured Business Credit Cards
As we’ve said, secured business credit cards are especially provided for companies with bad credit or no credit. What are the requirements you need in order to get approved for a secured business credit card account?
First, an entrepreneur must open a savings account and maintain the minimum required balance in his account. This is called a security deposit which would be used by the bank in case the account holder fails to pay off his credit card balances. For this reason, the amount of security deposited often determines the credit limit that would be given to the account holder.
If you placed a large amount in your security deposit, then you can enjoy a higher credit limit. On the other hand, if you can only afford a few hundred dollars as security, your credit line would most likely be low. Nevertheless, you can expect a guaranteed approval of your application regardless of the status of your credit.
How It Can Help Your Small Business
If you currently have a bad credit history, you may not qualify for business credit cards with the best deals. Still, you don’t have to suffer from bad credit forever. In fact, as soon as you get approved for a secured business credit card, you can immediately start working on improving your credit. How?
One important thing to remember is to be consistent with your payments. If you’re really serious about raising your credit, you need to be conscious about submitting your payments on time. Don’t forget that a single delay or miss can easily pull down your credit score. It is also crucial to pay attention to your spending and to stay within your given credit limit.
You may need to wait at least six months to a year before you can see an improvement in your credit history. Needless to say, by managing your secured business credit card correctly, you can be sure that you’ll be enjoying excellent credit history soon.
What to Expect About A Secured Business Credit Card
You may find that secured business credit cards have higher interest rates and fees compared to credit cards that require good to excellent credit. Understandably, because of the risk involved, credit card companies charge higher fees for their services. Still, this doesn’t mean that you should settle for unreasonable charges.
If you need a secured credit card for your small business, you need to be willing to spend time and effort in exploring the market to search for the right one. Read credit card reviews and compare each one more accurately by reading the fine print. Find a secured credit card that regularly reports your payments to the credit bureaus so that your credit history can be updated right away. Lastly, after improving your credit, request for an upgrade to a non-secured business credit card account.
Credit Cards Resources
Sunday, August 9, 2009
The Difference between Business Credit Card and Corporate Cards
If you think that business credit card and corporate credit cards are the same, let this article help you compare the differences between the two. If you own a small business, you’ll be glad to know that small business credit cards are especially meant to serve small business entrepreneurs like you.
Small Business Credit Cards
Credit card companies realize the potential of the small business clients and for this reason, they have introduced small business credit cards in the market. Unlike a corporate credit card, applying for a small business credit card is not at all complicated. In fact, even newly started business can get approved for a business credit card using the business owner’s personal credit history. But what if your personal credit score isn’t as impressive as you want it to be?
Secured business credit cards are designed especially for business owners with bad credit. To make up for your bad credit, a collateral or “security” would be required and this can be your home or a property that you own. Both an unsecured business credit card and a secured business credit card are great tools in establishing a separate business credit for your company.
Corporate Credit Cards
What about corporate credit cards? As its name implies, these business credit cards are exclusively offered to large business owners or corporations. If you take a look at the business credit cards advertised today, all of these are credit cards for small businesses. Credit cards for corporations are actually not advertised at all.
Unlike a small business credit card where you can apply online, corporate credit cards involve a more complicated procedure. How can a large business obtain a corporate credit card? Before the application is submitted, the business owner along with his partners will set up a meeting with the corporate credit card’s representative. In this meeting, the specific needs of the company would be discussed as well as the requirements they need to submit for approval.
Since a corporation is often a partnership and involves a huge number of employees, one can expect that it also has complex needs. The credit card company would see to it that these specific needs are properly addressed and that the corporate credit card will duly serve its purpose.
Business Credit Cards – Partners for your Business
Clearly, no matter what type of business you own- whether it may be a small business, homebased business, medium-sized business or a corporation- there is a business credit card that is designed to suit your needs. If you’re a small business entrepreneur, there’s no need to be afraid that a business credit card is just made for businesses with incredibly huge expenses. Even if you only have a few business expenses, getting a business credit card is worth the deal.
Credit Cards Resources
* Business Credit Card Reviews
* Business Credit Card Articles
* Free Credit Report
Small Business Credit Cards
Credit card companies realize the potential of the small business clients and for this reason, they have introduced small business credit cards in the market. Unlike a corporate credit card, applying for a small business credit card is not at all complicated. In fact, even newly started business can get approved for a business credit card using the business owner’s personal credit history. But what if your personal credit score isn’t as impressive as you want it to be?
Secured business credit cards are designed especially for business owners with bad credit. To make up for your bad credit, a collateral or “security” would be required and this can be your home or a property that you own. Both an unsecured business credit card and a secured business credit card are great tools in establishing a separate business credit for your company.
Corporate Credit Cards
What about corporate credit cards? As its name implies, these business credit cards are exclusively offered to large business owners or corporations. If you take a look at the business credit cards advertised today, all of these are credit cards for small businesses. Credit cards for corporations are actually not advertised at all.
Unlike a small business credit card where you can apply online, corporate credit cards involve a more complicated procedure. How can a large business obtain a corporate credit card? Before the application is submitted, the business owner along with his partners will set up a meeting with the corporate credit card’s representative. In this meeting, the specific needs of the company would be discussed as well as the requirements they need to submit for approval.
Since a corporation is often a partnership and involves a huge number of employees, one can expect that it also has complex needs. The credit card company would see to it that these specific needs are properly addressed and that the corporate credit card will duly serve its purpose.
Business Credit Cards – Partners for your Business
Clearly, no matter what type of business you own- whether it may be a small business, homebased business, medium-sized business or a corporation- there is a business credit card that is designed to suit your needs. If you’re a small business entrepreneur, there’s no need to be afraid that a business credit card is just made for businesses with incredibly huge expenses. Even if you only have a few business expenses, getting a business credit card is worth the deal.
Credit Cards Resources
* Business Credit Card Reviews
* Business Credit Card Articles
* Free Credit Report
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