When it comes to business credit, there are several terms that are commonly used to discuss this topic. Understanding these terms is essential for anyone who wants to build and maintain good credit for their business. So let’s go over a few so that you can feel empowered and educated when you are in a Business Finance situation.
EIN: Employee Identification Number, this is the SSN for your Business
DUNS#: This is your identifier with Dun & Bradstreet, the #1 business credit agency
Tradeline: An account reporting on your business credit
Net 30: Tradeline that has terms of 30 days, which means you have 30 days to pay for your purchase
Credit score: Numerical score that represents your business’ creditworthiness.
Credit report: A detailed record of your business’ credit history, which includes the credit accounts, payment history, and public records (bankruptcies or liens). You can access this on Nav.com
Collateral: Collateral is an asset that a borrower pledges to a lender as security for a loan. If the borrower fails to repay the loan, the lender can seize the collateral as repayment.
Understanding these terms is essential for anyone looking to establish and maintain good credit for their business. By familiarizing yourself with these terms and taking steps to improve your creditworthiness, you can access the financing you need to grow your business and achieve your goals.
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