Because business credit reports play such a large role when you apply for any type of credit or loan, performing business credit checks on a regular basis is strongly recommended. It's always a good idea to know what's on your credit report before applying for credit or a loan. Moreover, creditors and lenders will use credit reports to determine if you are a credit risk.

Business credit checks can also help you lower your level of risk in the eyes of lending institutions, by cleaning up any unsavory information on your report before applying for a loan. The best way to a cleaner report is by paying all of your debt obligations in full and on time. This way, you'll be a candidate that no bank can turn down.

There are two other reasons to perform business credit checks on a regular basis: human error and identity theft. Many times a person's business credit rating can be affected by a clerical error or computer glitch; the latter happens when your file is mixed up with that of someone with a similar name. Identity theft, on the other hand, is a bit more complicated and troubling.

In recent years, identity theft has risen significantly. What happens is a thief takes over or opens accounts in your name, running up large balances in goods or cash advances. If you don't perform routine business credit checks on your report, it could be months before you even hear about getting ripped off. However, if you're consistently monitoring your credit report, then new accounts opened by a thief using your identity will appear on your credit report, alerting you to the fact that identity fraud has taken place, and you need to act immediately.