The Guide to Business Credit Scores

Businesses, just like individuals, will often benefit from borrowing capital. Obtaining funds can help a business pay its basic expenses, weather times of economic uncertainty, and pursue its long-term goals.

Before your business can have access to credit, lenders and other parties will almost always take a look at your business credit score.While different from your personal credit score in some ways, lenders will still look to confirm that your enterprise has the ability to borrow funds and pay them back as agreed. Maintaining a strong business credit score will enable your business to grow quicker and also make it easier to access cash should any problems arise.

What is a business credit score?

A business credit score represents your business’ credit worthiness. Most business credit scores range from zero to 100 (with higher scores considered better). New businesses or businesses that have a history of missed payments will have lower scores, whereas businesses that have consistently made their payments on time will have higher scores. The three major bureaus reporting business credit scores are Dun & Bradstreet, Equifax, and Experian.

Why is your business credit score important?

Your business credit score is very important. A high score will not only make it easier to qualify for loans, but it will also make it easier to secure more desirable interest rates. Lenders want assurance that if they lend you business capital, the loan will be paid back as agreed. If you are unable to prove that you have a history of reliable borrowing, they will want to be compensated for the risk they are taking by lending to you. Even if your business is not planning on borrowing any time soon, maintaining a strong business credit score will still be in your best interest. In some cases, your business credit score may also be considered by possible investors, insurers, and other relevant parties.

What is the difference between your personal and business credit scores?

While the principles underlying your personal and business credit scores are the same—proving your lendability—there are quite few notable differences between these two figures. While your personal credit score exists within a range of 300 to 850, your business score will be within a range of 0 to 100. Additionally, business credit scores are much less standardized (and thus, more difficult to predict). Your business credit score will also be available to the public, meaning that lenders, investors, insurance companies, and even rival businesses will have an opportunity to view this information.While your personal credit score can be easily accessed for free, you will many times need to pay to view your business credit score. When compared to personal scores, business credit scores have a higher potential for inaccuracy, meaning that even if you aren’t planning on borrowing, you should still check these scores at least once per year.

How is your business credit score calculated?

There are three main business credit bureaus—Dun & Bradstreet, Equifax, and Experian—and each of the bureaus uses its own system for determining credit scores. Using third parties for verification, these bureaus will gather info from banks, lenders, trade associations, and other relevant sources to learn more about your credit history.

  • Dun & Bradstreet uses a “Paydex” score, along with a commercial credit score and a financial stress score. These scores help determine the risk of engaging in a contract with your business, along with how much your business could feasibly borrow.
  • Equifax offers a business credit score that is most similar to your personal credit score. The company’s payment index will illustrate your business’ history of borrowing capital and paying it back. Additionally, the “business failure score” helps quantify the likelihood that your business will experience financial problems over the course of the next year.
  • Experian will look at more than just your payment histories. The score also accounts for things such as public records, which can include judgments, liens, and other factors. The size and structure of your business will also be accounted for. Looking at your Experian score will help your business decide how to make future changes.

Because different lenders will look at different scores, you will want to make sure all scores are accurate and up to date.

What variables impact your business credit score?

The most important variable behind your business credit score will be your payment history. Lenders, insurers, and other relevant parties will want to see tangible evidence that every time you have borrowed in the past, you paid everything back as agreed upon and there were not any issues. In some cases, keeping healthy finances and protecting yourself from risk will also be beneficial. If, for some reason, your business happens to lose 50 percent of revenue overnight (something that’s been a reality for many businesses in 2020), would you be able to stay afloat? Strong payment histories, sound finances, and an extended financial history will all cause your business credit score to increase.

How do you check your business credit score?

Business credit scores can be accessed directly from all three of the major bureaus—for a price. At $39.95, your Experian credit score will be the most affordable. Your Dun & Bradstreet score will cost $61.99 and the most expensive score, Equifax, costs $99.99. These scores can all be accessed directly from each bureau’s website. The reports will include your score, along with other details such as recommended limits, public record summaries, and other bits of valuable information.

Alternatively, you can access your business credit score for free through You will be able to access your personal credit score, as well as a variety of other tools and articles related to business credit, operating expenses, tips, tricks and more.

How can you improve your business credit score?

Your business credit score will have an impact on your access to capital, your ability to obtain insurance, and many other things—naturally, you’ll want to do all you can to make sure these scores are as high as they can be. Start by checking your credit score, looking at the details, and immediately addressing any errors. Additionally, be sure to make all payments in full and on time—if, for some reason, you are going to be late with a payment, communicate your intention to do so with your lenders, rather than simply missing payments. Furthermore, you will want to reduce your credit utilization ratio. This will require you to pay off your balances, decrease spending, begin overpaying your bills, and potentially increase your credit limit (without increasing your debt). You should also make sure your business is in a financially healthy position; even factors that don’t directly affect your business credit score could still affect peripheral scores, such as your “business failure score.”

Final score

Maintaining a strong business credit score will play a crucial role in your business’ ability to access future sources of capital. Your business credit score, like your personal score, illustrates your ability to make payments in-full and on-time. By taking time to learn about your business credit score and understand how the role this score plays in your business, you’ll be one step further down the road to financial success.

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