How To Check My Business Credit Score

Business Credit Score

Maintaining a healthy credit profile is crucial for any business. Whether you are seeking a loan, negotiating with suppliers, or simply looking to gauge your financial health, knowing your business credit score can provide invaluable insights. Because understanding the nuances of business credit scores can be somewhat complex, we aim to help you navigate this process with ease.

Understanding Business Credit Scores

Business credit scores are numerical representations of your company’s creditworthiness, reflecting how likely you are to repay debts based on your past financial behavior. These scores play a pivotal role in various business decisions, influencing the terms of credit extended to you by suppliers, the interest rates on loans, and even your eligibility for certain financial products. Unlike personal credit scores, which typically range from 300 to 850, business credit scores can vary depending on the credit bureau, but generally range from 0 to 100 or similar scales.

Major Credit Bureaus for Business Credit

Several credit bureaus specialize in business credit reporting, each with its own scoring system and criteria. The three major bureaus are Dun & Bradstreet, Experian Business, and Equifax Business. Understanding their specific methodologies can help you better manage your business credit profile.

Dun & Bradstreet

Dun & Bradstreet (D&B) is perhaps the most well-known business credit bureau. Their primary score is the Paydex score, which ranges from 0 to 100. A higher Paydex score indicates that a business is more likely to pay its bills on time. To generate a Paydex score, you need a D-U-N-S Number, a unique nine-digit identifier for businesses.

Experian Business

Experian Business provides a business credit score known as the Intelliscore Plus. This score ranges from 1 to 100, with higher scores indicating lower risk. Experian’s scoring model considers various factors, including your business’s payment history, credit utilization, and public records such as bankruptcies.

Equifax Business

Equifax Business offers the Business Credit Risk Score, which typically ranges from 101 to 992. This score predicts the likelihood of a business becoming severely delinquent in its payments. Equifax also provides a Business Failure Score, which ranges from 1,000 to 1,880 and predicts the likelihood of a business failing within the next 12 months.

Steps to Find Your Business Credit Score

Finding your business credit score involves a few steps, which I will outline below.

1. Register with the Credit Bureaus

To start, you need to register with each of the major credit bureaus. This usually involves creating an account and providing some basic information about your business, such as your business name, address, and Employer Identification Number (EIN).

Dun & Bradstreet

First, visit the Dun & Bradstreet website and search for your business using your business name and location. If your business is not already listed, you can apply for a D-U-N-S Number. This number is essential because it is used to track your business credit file. Once you have your D-U-N-S Number, you can request a Paydex score report.

Experian Business

Next, go to the Experian Business website. Here, you can search for your business and purchase a one-time credit report or subscribe to an ongoing monitoring service. Experian offers several packages that provide detailed insights into your business’s credit profile, including the Intelliscore Plus.

Equifax Business

Finally, visit the Equifax Business website. Similar to the other bureaus, you can search for your business and purchase a credit report. Equifax provides various products, including comprehensive credit risk assessments and monitoring services that keep you informed about changes to your business credit profile.

2. Obtain Your Credit Reports

Once you have registered with the credit bureaus, the next step is to obtain your business credit reports. Each bureau offers different types of reports, ranging from basic credit summaries to detailed analyses of your credit history, payment behavior, and credit utilization.

Dun & Bradstreet

With Dun & Bradstreet, you can purchase a credit report that includes your Paydex score, financial stress score, and other relevant information. This report will give you a comprehensive overview of your business’s creditworthiness and financial health.

Experian Business

Experian Business offers various report options, including credit score reports, credit summary reports, and detailed credit profiles. These reports provide insights into your Intelliscore Plus, payment history, and other critical factors that affect your business credit.

Equifax Business

Equifax Business provides credit reports that include your Business Credit Risk Score and Business Failure Score. These reports offer a detailed analysis of your credit risk, helping you understand the factors that contribute to your overall credit profile.

3. Review Your Credit Reports

After obtaining your credit reports, it is essential to review them carefully. Look for any discrepancies or errors that might affect your credit scores. Common errors include incorrect business information, outdated payment records, and inaccuracies in public records. If you find any errors, you should contact the respective credit bureau to dispute the information and request a correction.

4. Monitor Your Credit Regularly

Regular monitoring of your business credit score is crucial for maintaining a healthy credit profile. Many credit bureaus offer subscription services that provide ongoing monitoring and alerts for any changes to your credit report. By staying informed about your credit status, you can take proactive steps to address any issues and improve your creditworthiness.

Factors Affecting Your Business Credit Score

Understanding the factors that affect your business credit score can help you manage your credit profile more effectively. While each credit bureau has its own scoring model, several common factors influence business credit scores:

Payment History

Your payment history is one of the most significant factors affecting your business credit score. Timely payments to suppliers, creditors, and lenders positively impact your score, while late payments can significantly harm it.

Credit Utilization

Credit utilization refers to the ratio of your current credit balances to your total available credit. Maintaining a low credit utilization ratio is generally favorable because it indicates that you are not overly reliant on borrowed funds.

Length of Credit History

The length of your credit history also plays a role in determining your business credit score. A longer credit history provides more data points for assessing your creditworthiness, which can lead to a higher score.

Public Records

Public records, such as bankruptcies, liens, and judgments, can negatively impact your business credit score. It is crucial to address any public record issues promptly and work towards resolving them to improve your credit profile.

Business Size and Industry

Some credit bureaus consider the size and industry of your business when calculating your credit score. Larger businesses or those in less risky industries may receive higher scores due to perceived lower risk.

Improving Your Business Credit Score

If you find that your business credit score is not where you want it to be, there are several steps you can take to improve it:

Pay Bills on Time

Consistently paying your bills on time is one of the most effective ways to improve your business credit score. Establishing a track record of timely payments demonstrates your reliability to creditors and lenders.

Reduce Credit Utilization

Keeping your credit utilization low can positively impact your credit score. Aim to use less than 30% of your available credit at any given time.

Resolve Public Records Issues

Addressing and resolving any public record issues, such as liens or judgments, can help improve your credit score. Work with creditors or legal professionals to resolve these issues and update your credit reports accordingly.

Monitor Your Credit Reports

Regularly monitoring your credit reports allows you to stay informed about your credit status and address any inaccuracies or issues promptly. Many credit bureaus offer monitoring services that provide alerts for changes to your credit report.

Build Strong Relationships with Suppliers

Establishing strong relationships with your suppliers and negotiating favorable payment terms can help improve your business credit score. Positive trade references from suppliers can enhance your credit profile.

Conclusion

Knowing your business credit score is essential for managing your financial health and making informed business decisions. By understanding the major credit bureaus, the factors that affect your credit score, and the steps to obtain and review your credit reports, you can take control of your business credit profile. Regular monitoring and proactive management of your credit can help you build a strong credit history, improve your creditworthiness, and achieve your business goals.