How a Company Credit Report Affects Business Relationships

While it is important that you understand your business credit report, that’s not the only factor influencing your overall business financial score. You should also know about any business associations that could affect your company’s credit.


If you’re considering entering into a business agreement, then you need to make sure that your potential partner is trustworthy. Some red flags to look out for when getting into a new business relationship are:

  • Is the registered address different from the company address?
  • Does the company have any negative public reviews?
  • Is the company account up to date?
  • Are there any restrictions on the business?


One of the merits of a business credit report is that is will help you to make good decisions about your business partners, suppliers, and customers. It does this in the following ways:


Business Verification

Being business savvy means being able to recognize potential red flags before you lose any money. You should always conduct your due diligence, especially when considering a new business partner. A free company credit report can tell you whether the company is genuine and whether it has been in business long enough.


Financial Performance

Financial performance is a key part of a business contract and companies need to know the financial condition of their suppliers. For example, you might be in contract with a supplier that has just gone bankrupt. By understanding their financial position you can make better decisions about your business.


Directors and Shareholders

Checking a company’s directors and shareholders is one of the many checks that’s done when someone is looking to invest in a company or buy shares of stock. This can be accomplished safely and quickly through a business credit report.


Companies are required to provide a free company credit report when they first file a public offering. For a public company, this will be on the day that the company’s stock begins trading. Companies must also file a list of their directors and shareholders with their state when they file annual reports.


Key Risk Indicators

Your business credit report can identify key risk indicators that may increase the chances of your company becoming a victim of fraud. Key risk indicators might include a customer who has been late paying bills in the past, or a business that has filed for bankruptcy. These are signs that you should look into the customer or company further before doing any business with them.



As a business owner, you have to be accountable and responsible for your business decisions. You should know what kind of credit score your partners have before any business dealings. A company’s credit score is a good indication of how it will handle its finances. A company credit report is a good way to decide if the company is reputable enough to pursue business with. If something negative comes up on the report, then it is a sign to do further research before making a final decision.


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