{"id":1004,"date":"2022-09-23T11:43:32","date_gmt":"2022-09-23T11:43:32","guid":{"rendered":"https:\/\/blogs.enkash.com\/?p=1004"},"modified":"2024-09-04T08:43:06","modified_gmt":"2024-09-04T08:43:06","slug":"manage-low-business-credit-score","status":"publish","type":"post","link":"https:\/\/www.enkash.com\/resources\/blog\/manage-low-business-credit-score","title":{"rendered":"Manage Low Business Credit Score with Corporate Cards"},"content":{"rendered":"\r\n\r\n\r\n

The pandemic has pushed entrepreneurs to the edge of their seats. Many find themselves struggling with business payments due to pending invoices or the inability to finance working capital.<\/p>\r\n\r\n\r\n\r\n

Credit scores and technical jargon often get in the way. But we\u2019re here to ease your worries. So, worry less and read along.<\/p>\r\n\r\n\r\n\r\n

<\/span>What is a Business Credit Score?<\/strong><\/span><\/h2>\r\n\r\n\r\n\r\n

A business credit score is the ability of a business to avail loans (e.g., working capital loan) from the market (from banks or Non-Banking Financial Companies (NBFCs). It is the \u201ccreditworthiness\u201d of your company and foretells the financial risks for creditors who shall lend your business the needed money.<\/p>\r\n\r\n\r\n\r\n

Business credit scores are also evaluated for issuing corporate facilities (such as Corporate Credit Cards<\/a>) to entrepreneurs. It is sensitive to many variables, such as payment habits, credit utilization, and consumer feedback, to name a few.<\/p>\r\n\r\n\r\n\r\n

However, it is to be noted that it is not the same as a personal credit score. Entrepreneurs can be creditworthy even when they have a low business credit score, which can mean a risky decision for creditors to lend large sums of money.<\/p>\r\n\r\n\r\n\r\n

<\/span>Good vs. Bad Business Credit Score<\/strong><\/span><\/h2>\r\n\r\n\r\n\r\n

A Credit Report helps you calculate your business credit score. If you are applying for business loans such as the working capital loan<\/a>, evaluate your credit score beforehand.<\/p>\r\n\r\n\r\n\r\n

\r\n

Credit reports analyze variables such as credit payment history, credit utilization efficiency, credit balance, loan defaults & bounced cheques, etc.<\/p>\r\n\r\n\r\n\r\n

Business credit scores are measured across various standards such as the PAYDEX Credit score, financial stress credit score, Experian Business credit score, Equifax credit score, Credit Information Bureau India Limited (CIBIL) score<\/a>, etc.<\/p>\r\n\r\n\r\n\r\n

Each of these standards relies on a detailed analysis of credit lending variables and data gathered from vendors, suppliers, and independent market bodies to determine the credibility of a business.<\/p>\r\n\r\n\r\n\r\n

The CIBIL score is the most widely used score for Indian MSMEs and is licensed by the Reserve Bank of India (RBI)<\/strong><\/p>\r\n<\/div>\r\n\r\n\r\n\r\n