By Ryan Velez
If you plan on being a successful entrepreneur, it would be in your best interest to pay attention to business credit and how it can help your business. Good business credit is a valuable asset that can help open up new financing and business opportunities, and save business owners money when they borrow. However, what you may not realize is that in addition to working on your own credit, you can help improve the business credit of your customer and clients. Nav explains how you can do so by reporting payments to business credit bureaus, and why you may want to do so.
One thing you need to realize is that many of your customers or clients may not necessarily go to the effort of reporting their payments themselves. Perhaps it’s a matter of not knowing how the process works, not having enough time, or not knowing the benefits. This allows you the opportunity to explain why they benefit from having you report, potentially improving your relationship with said client as they can see you are looking to help them. In addition, you can help yourself in several ways. For one, many credit bureaus offer services to those who report to them, for example, providing you with useful data and trends.
Sometimes, benefits may be a little more self-serving, but there’s not necessarily anything wrong with that. In your personal life, you’re more likely to prioritize bills that would affect your credit, and the same mindset applies to business expenses. Making it clear that you report payments to credit bureaus gives clients more incentive to put your invoices at the top of their pile to avoid potential credit impact. The reality is that not all clients are timely in handling their payments. While you may find this out too late, reporting to credit bureaus means that other business owners can find out who are potential deadbeats to help properly manage risk.
One thing to note is that different credit bureaus, like Dun and Bradstreet and Experian have different procedures for reporting information. However, it’s easier than ever than to figure out how, and generally going to the websites of these different bureaus can get you started. In addition, there are several third-party tools that can get the ball rolling, just be sure to do your homework to see what is the best match for your need.