Do businesses actually have a credit score? The short answer is — yes. And, these measures of financial responsibility are calculated much in the same way individual credit worthiness is determined. Although it’s not something that’s widely discussed or known about in the consumer world, businesses do have credit histories, and therefore detailed reports which give them scores. Read on to learn the basics about business credit scores and what you need to know. How Business Credit Scores are Calculated As mentioned above, a business credit score is measured very similar to the way individual scores are calculated. Meaning, the length of credit history, types of credit used, payment history, debts owed, and other factors. Unsurprisingly, the better a business handles its financials, the better score it earns. Businesses of all sizes may need credit. A carpenter with no employees may want to borrow money to buy equipment. A marketing professional with a few employees may be ready to purchase furniture and computers for a new office. A salon owner with subcontractors but no employees may want to buy, rather than rent, commercial property. Any type of business could benefit from a business credit card. —US News and World Report Of course, there are some differences, one of the most minor being the scores themselves. While individual credit scores range from a low of 300 to a high of 850, business scores range from 0 to 100, with 100 being the highest. Additionally, business credit scoring services use different models in order to determine the creditworthiness of companies. Also, instead of there being three main credit reporting bureaus for individuals, Equifax, Experian, and TransUnion, there are two principal business credit scoring entities: Dun & Bradstreet and Experian. How to Improve a Business’ Credit Score Since business credit scores rely on many of the same elements as individual consumers, nearly the same factors are used to assign a credit worthiness score. So, in order to maintain or improve a business’s credit score, companies must do the following: Keep debts manageable. Opening too many accounts and taking on large amounts of debt will only increase your financial risk. This not only hurts your business’s credit worthiness, it also puts a lot of strain on you as the owner. This is why it’s best to keep your credit accounts to a minimum and pay off as much debt as possible. Utilize different types of credit. Credit mix is also a consideration, meaning businesses having different types of credit accounts. While it’s advantageous to have various types of credit, it is equally advantageous to keep these to a minimum so you’re able to pay what’s owed in a timely manner. For instance, you might finance or lease vehicles through your business, have a business credit card, and maintain vendor credit accounts. All of these will go into determining your business’s creditworthiness. Be vigilant with your personal credit. One misnomer that entrepreneurs have about business credit is that it’s somehow separate from their personal credit and/or financial responsibilities. However, this is completely false. Business credit accounts almost always require an individual or personal guarantee. This of course means that if the business defaults on a line of credit, you are personally responsible for that particular debt. Moreover, business credit is partially scored on your personal credit, so it’s best to maintain a good personal score for the benefit of your company’s creditworthiness. What other suggestions do you have about maintaining a business’ credit score? Please take a moment to share your thoughts and experiences so others can benefit from your perspective! Interested in learning more about business? Then just visit Waters Business Consulting Group.

There’s an internet meme going around that makes a profound point, “Hire based on attitude, not skills — because you can always teach skills.” And, it backs up some very interesting statistics. For instance, did you know that 85% of a company’s success is due to the team’s attitude, and only 15% is due to individual skills? That’s why when businesses are looking to hire new employees, they should focus on finding individuals with the right attitude, not just those who have the perfect skill set. So, let’s expound a bit as to why. Attitude vs. Skill When it comes to hiring new employees, many businesses focus on finding candidates with the appropriate skills for the job. However, in order to create a successful and productive team, it’s important to also consider attitude. A positive attitude is essential for maintaining a positive work environment and achieving company goals. Is it better to have someone in a team lead role who has a strong work ethic and is all-around positive and can learn the skills or is it better to hire someone based on skills only? What is most important — the skill set or the attitude and growth potential? It depends on the job. There are some jobs where it might make sense to hire for attitude and teach the work itself when it won’t require a major investment of time to do so. There are other jobs where experience and a pre-existing skill set are essential. —Inc.com Therefore, businesses should focus on hiring people who have the right attitude, even if they may not have all the necessary skills. With the right attitude in place, employees can be taught the required skills over time. This makes sense, especially when looking at first-time job seekers in entry-level positions. Those individuals often have little to no skills at all. Those are taught through direct instruction and experience. The Advantages of Hiring Based on Attitude Rather than Skills There is no question that skills are a critical component of any employee’s toolkit. However, research has shown that an individual’s attitude is a stronger predictor of success than their skills. In order to capitalize on this, businesses should consider hiring based on attitude rather than skills due to the following reasons: Longevity. Hiring based on attitude will help you find candidates who are motivated and passionate about their work. These are the employees who will go above and beyond for your company. They will be more engaged in their work, and they will be less likely to leave their positions. Synergy. Hiring based on attitude will help you find candidates who are a good fit for your company culture. This is extremely important, as it can save you time and money in the long run. If a candidate is not a good fit for your company culture, they will likely be unhappy and unproductive in their position. Flexibility. Hiring based on attitude will help you find candidates who are able to adapt to change. When a company hires based on skillset, they may hire someone who has very specific knowledge and experience in their field. But this person might not be able to adapt when things change in the future. What other benefits are gained by hiring based on attitude instead of on skillset? Please take a moment to comment and share your thoughts and experiences so others can benefit from your perspective! Interested in learning more about business? Then just visit Waters Business Consulting Group.