It’s not uncommon for a company to rely on financing to thrive. For example, you might take out a loan to upgrade your equipment or carry a balance with one or more vendors to improve cash flow when business is slow. As such, it’s important to maintain a high credit score and avoid debt collection at all costs. Here are a few factors that can hurt a company’s credit in a major way. 

3 Factors That Hurt a Business’s Credit Score

1. Past Due Payments

If a company has a history of making late payments, it’s going to affect its credit score. Even if the missed obligations don’t go as far as debt collection, they can be reported to the major credit bureaus and will appear as derogatory marks. 

2. Liens or Judgments

Liens or judgments against any business equipment or property will have a major impact on the company’s credit score. Regardless of whether the owners resolve any such issues in a timely manner, they will be reported for at least three years. 

3. Bankruptcy Filings

Declaring bankruptcy has a similar effect on business credit as it does on personal credit. When a company files Chapter 7 or 11, its score will take a massive hit. Additionally, the discharge will remain on its credit report for nine years. 

If your clients have failed to pay for the products or services you’ve provided, remind them that debt collection will hurt their business credit score. If they still don’t pay, turn to Joseph, Mann & Creed in Twinsburg, OH. This third party collection agency is a global leader in the industry. As one of just 45 U.S. agencies certified with the Commercial Law League of America, they offer a broad range of services that will protect your bottom line. Connect with them on LinkedIn or visit their website to learn more about the business services they provide. To discuss your own debt collection needs, call (216) 831-5626.