So, you want to build your business credit profile? Good move. Just like personal credit, a good business credit score and report can open up doors to better interest rates, terms, business partnerships, and opportunities to level up your business.
The problem is that not all vendors or accounts you’re paying report to business credit bureaus. See, the business credit world isn’t as heavily regulated as personal credit, so there’s little motivation for vendors to report payments (or lack thereof) to the bureaus.
With that in mind, it’s important to be mindful of which vendors to go into business with when you’re looking to build business credit. Business insurance can certainly be impacted by your business credit score, but do your timely payments to your insurance provider make it to your business credit report?
Do I Need Business Insurance?
Business insurance is a critical tool for making sure you have the protection you need for your business in case of an emergency. Typically a business will want to get general liability insurance as well as coverage for commercial property, disasters, data breaches, workers' comp, and a variety of other potential costs.
There are plenty of questions surrounding how to get business insurance, including what type you'll need, how much you'll pay, and what you need in order to apply for it. One of the most important things you need to know about your own business is your business credit score, but do you need a business credit score to get business insurance? Not necessarily, but it can help you get a better rate.
How Does Business Insurance Impact Business Credit?
The short answer is that business insurance does not, by default, impact your business credit. As mentioned above, business credit is not regulated as heavily as personal credit, and companies are not required to report your payments to the credit bureaus.
This doesn’t mean you should be lackadaisical about your insurance payments. If your policy requires you to be listed as the owner of the company with your social security number, your personal credit could be targeted due to your delinquent account.
It’s not all bad news, though. There is a way for your timely insurance payments to be reported to the business credit bureaus.
How Do I Report My Payments to the Bureaus?
Legislation around personal credit essentially takes the process of reporting your tradelines out of your hands. Without such regulation, you may have to take charge of letting the bureaus know how awesome you are.
Tradeline reporting services such as eCredable make it possible for business owners to beef up their business credit profile by reporting payments to utility companies and other common business expenses. They may be able to work with your business insurance accounts, as well.
This is great news for business owners, and opens up the possibilities for more complete and favorable business credit reporting.
Making timely payments is always important, regardless of where the payments are reported. As you look to build a business credit profile, be mindful and do your due diligence to know which vendors or lenders report to the bureaus, and seek opportunities to report your good payments where possible.
Just like insurance protects you and reduces liability, a good business credit profile can save you money and open up great opportunities for your business.
This article was written and contributed by Nav - the free, modern way for business owners to manage their business credit and get streamlined access to financing. Nav.com and its mobile app give free access to easy-to-read personal and business credit reports and monitoring all in one spot. It also provides tools to build business credit and a marketplace that matches users to lending options based on their approval odds. This all makes it much easier for business owners to get affordable funding, lower their costs and save time.