A business credit report is a record of a business’s financial history which allows others to determine a business’s creditworthiness. The information in a business credit report is used to calculate a business’s credit score. In this article, we’ll review everything you need to know about business credit reports, including what’s in it, who can see it, and more.
If you want to check your credit score and get a business credit summary before we get started, you can do so with NAV for free. You can also get full business credit reports from NAV for a small fee.
What is a Business Credit Report?
A business credit report is a document that assesses the creditworthiness of a company. Business credit reports typically collect information on a company’s business structure, industry, financial performance, payment history, and more. A business credit report is used by vendors, lenders, and other creditors to check the credit of a potential partner company.
Business credit reports are created each by the three main credit reporting bureaus as well as by FICO. They include:
Types of Business Credit Reports
Dun & Bradstreet reports can be either self-generated or generated by creditors or vendors who report your late or delinquent payments. Experian, Equifax, and FICO reports are automatically generated using public records but business owners can also self-report information. Regardless, unlike with personal credit, anyone can pay to access your business credit report.
Typical information you should expect to find on your business credit report:
- General company information
- History of the business
- Business registration information
- Government activity summary
- Company operational data
- Industry data
- Public filings (liens, judgments, and UCC filings)
- Past payment history
While the information on the 4 business credit reports is largely the same, each report has its own proprietary method for calculating its respective credit score. For more information on business credit scores, you can read our article on how business credit scores work.
Why is a Business Credit Report Important?
A business credit report is important because it’s used by vendors, lenders, and other creditors to determine a company’s business credit. For example, a company with a good credit report is more likely to negotiate favorable terms with their creditors, lessors, and suppliers while a company with credit report filled with negative items is less likely to.
A business credit report is important for the following companies:
- Companies that are negotiating payment terms with vendors, suppliers, or customers
- Companies that are getting pre-approved for a loan
- Creditors that are assessing the application of a potential business borrower
For example, if you’re negotiating payment terms with a vendor, chances are that if you have good credit you can receive net-30 or better payment terms. This allows you to float payments to that vendor while you wait for payment from your customers. The result is a more financially solvent company that won’t have to rely on working capital loans or payroll financing.
On the flip side, if you’re a B2B company assessing the creditworthiness of a potential customer, you can pull that customer’s business credit. If the customer wants net-60 payment terms but you see that they have poor credit, you can instead require upfront payments rather than net terms. This will protect your company from late or delinquent payments.
What’s more, unlike personal credit, anyone can pull your business credit report. At any point in time a creditor or vendor can check your business credit, and vice versa. However, while inquiries on a personal credit report can have a (small) negative impact on your credit score, that is not the case with business credit scores.
Further, business credit reports are typically generated by the bureaus using public records and information from creditors and vendors. This means that there’s a good chance that you have a business credit report even if you haven’t filled out any information yourself.
This makes it extremely important to check on your business credit report and ensure it’s accurate at least once a quarter. Unfortunately, many business owners don’t do this.
I spoke with Jay DesMarteau, Head of Small Business Banking at TD Bank, who told me that:
“TD bank recently asked 550 small businesses earning
$1 million or less about their credit practices. The survey found that as many as 69% of small business owners believe that they don’t already have a credit report, which they do. Further, only 15% of respondents had actually seen their business credit reports.”
Where Do You Get a Business Credit Report?
Business reports are generated by the three major credit bureaus below. FICO also has a business credit score that pulls information directly from these three credit bureaus. Let’s take a closer look at the 4 credit reports including how to get each one.
Agencies That Offer a Business Credit Report
Financial Stress Score,
Commercial Credit Score,
Business Failure Score,
Dun & Bradstreet Business Credit Report
The Dun & Bradstreet business credit report, also known as the D&B credit report, is the most commonly used business credit report for trade partners. It takes into account such data as late payment information, early or on-time payments, historical financial performance, company and industry information and more to assess a company’s creditworthiness.
The information is used to generate three main scores on the D&B business credit report:
- PAYDEX Score (1 – 100) – Used to rate a company’s ability to pay its past debts over a 2-year period, with 100 being the best.
- Commercial credit score (101 – 670) – Used to predict the chances that a company will default on its payments within a year, with 670 being the least likely.
- Financial stress score (1,001 – 1,875) – Used to predict the likelihood that a business will go out of business within a year, with 1,875 being the least likely.
For more information on your Dun & Bradstreet business credit report, you can read our article on your D&B credit report.
Where to Get a Dun & Bradstreet Business Credit Report?
Dun & Bradstreet creates its business credit reports in 1 of 2 ways. The first is that a report is self-generated by a company. The second is that a report is generated by a vendor or creditor when they a late or delinquent payment is submitted to the Bureau.
When getting your Dun & Bradstreet business credit report, the first step is to search their website for an existing report. You can do that by navigating to their website and clicking “company search” in the upper right-hand corner.
If your company exists in the database you’ll already have a DUNS number, which is the Dun & Bradstreet 9-digit identifier. If this is the case, it’s most likely because a creditor or vendor reported a late or delinquent payment you made. You can purchase your existing report for as little as $61. Afterward, you can verify that the information is correct as well as self-report additional business information.
If you don’t have an existing report it means that no creditors or vendors have reported you. If this is the case, you can create and purchase your report by applying for your own DUNS number and filling out the necessary information. The one-time fee is $229.
Alternatively, you can purchase Dun & Bradstreet’s Creditbuilder Plus, which gives you unlimited access to your business credit report. Monthly rates start at $159.
Experian Business Credit Report
The Experian business credit report assesses the creditworthiness of a company based on its trade and financial payment history and company financial information. Unlike the D&B business credit report, the Experian business credit report provides only one score and is known as the most straight-forward report available.
The Experian Credit Ranking Intelliscore ranges from 0 – 100 and it measures the probability of a delinquent payment. The goal of the score is to predict future payment behavior. The higher the score the lower the risk of a late payment.
To calculate its score, Experian takes into account business background information, collection history, company financial information, and other public data.
Where to Get an Experian Business Credit Report?
Unlike Dun & Bradstreet, Experian doesn’t require you to create an account or obtain a number. Instead, Experian combs publicly available data such as government records to compile information on your company and generate a business credit report.
However, like Dun & Bradstreet, Experian allows you to submit company-specific data such as financial performance. You can update your information and get a business credit report for $49.95, here.
Equifax Business Credit Report
Equifax uses industry data, public records, trade payment and financial payment history to assess the creditworthiness of a company. However, unlike Experian and Dun & Bradstreet, Equifax doesn’t collect information on the financial performance of a company.
Equifax uses this information to generate two business credit scores:
- Business credit risk score (101 – 992) – Evaluates the likelihood that a business will be more than 90 days overdue on financial obligations, with 992 being the least likely.
- Business failure score (1,000 – 1,880) – Evaluates the likelihood that a business will go bankrupt in the next 12 months, with 1,880 being the least likely.
Equifax calculates these scores by taking into account available credit, late payments, age of financial accounts, negative payment transactions, and more.
Where to Get an Equifax Business Credit Report?
Like Experian, Equifax doesn’t require you to obtain an I.D. number or fill out any paperwork. Instead, Experian uses all available public data, such as new business filings with the Secretary of State, to generate a business credit report.
You can get your Equifax business credit report for as little as $99.95 by navigating to their website and clicking the “contact us” button.
FICO SBSS Business Credit Report
The Fair Isaac Corporation, better known as FICO, also provides a business credit report of its own. The report is most commonly used by banks and lenders to approve loans and lines of credit. The FICO business credit report is most commonly used by lenders when approving an SBA loan.
FICO pulls information from the three credit bureaus to generate its report. The score found on your FICO business credit report is called the LiquidCredit Small Business Scoring Service (SBSS). This SBSS score ranges from 0 – 300 and measures the chance that a company will become delinquent on its payments. A score of 300 is the least likely that this will happen.
Where to Get Your FICO SBSS Business Credit Report?
Since FICO pulls information from the three existing business credit reports, the SBSS is more of a score than it is a report. Still, it’s important to understand your business’s FICO score. Your SBSS score is available for purchase with NAV for $49.99.
Typical Information Found on a Business Credit Report
All four business credit reports typically contain the same types of information. Once you get a copy of your business credit report it’s important to review the information in detail. To help you better understand your report, we’ve listed the main sections of a standard business credit report below.
To illustrate each section, we’ve provided screenshots from a sample Experian report. If you prefer to you use one of the other two agencies, you can also view a sample business credit report from Dun & Bradstreet or Equifax.
Your business profile is usually the first thing that shows up on your business credit report. Within your profile, you’ll find your business’s legal name, trade name, as the address of your headquarters. The business profile section will have additional company background information, such as incorporation details, parent and subsidiary details, and the number of employees.
Financial data will also be included in your typical business profile section. This data includes annual sales and profit pulled from your company’s past 3 years financial statements. For small businesses, business owners can choose whether or not they want to self-report this information. Just remember that accurate and up-to-date information can benefit your business credit report.
SIC and NAICS Industry Codes
In the screenshot above you’ll see that the business profile section also displays your company’s SIC and NAICS industry codes. These codes are used to describe the type of industry you operate within. While it seems simple, it’s important to have the correct codes on your business credit report because different industries have different levels of credit risk.
For example, a transportation software company like Uber or Lyft might be categorized as a transportation company rather than a software development company. This would increase their industry risk and make it harder for them to obtain the proper insurance for their businesses, among other things.
The following are the 5 highest-risk SIC classifications:
- Real estate investing and other types of investing
- Car sales
- Travel/transportation industry
- Money lending/collecting
Businesses in one of these industries can avoid being classified as high-risk by diversifying their business activities. If you want to invest to real estate, for example, you can create a business that does real estate marketing or business consulting, and then run your real estate investment as an arm of the business.
If you’ve been misclassified, you can update your business profile on the agency’s website or by contacting the agency directly. Industry codes are received through public record data such as responses to Census surveys or administrative records, so make sure you correctly identify your business on such records going forward.
Trade Payment History
The payment history section shows your payment history for the past 2 – 3 years. Typically included in the payment history section are payments made to vendors. Included with each payment is the date of sale, the amount of the sale, payment terms, as well as the payment date.
Late or delinquent payments are reported to collection agencies and credit reporting agencies who then report the late payments to the credit reporting bureaus. Early or on-time payments have to be reported by the vendor themselves to the credit reporting bureaus. This makes it important to work with vendors who are willing to report your payments.
Commercial Financial History
The commercial financial history section tracks your payment history to creditors, lenders, and insurers. For example, any payments made on a business loan, insurance policy, line of credit, equipment leases, and more will show up here.
Included in the section is such financing activity as the amount of credit you’ve received from lenders, the type of the product, the term of the loan or policy, as well as the original balance and remaining balance. When you’re shopping for a loan or working capital, lenders will most likely use this section when making an assessment of your application.
Legal Filings, Bankruptcies, & Collections
The legal filings, bankruptcies, and collections section is used to assess your business’s liquidity and financial health. Specifically, the section will report on UCC filings for the past 5 years, which are liens placed on your business’s assets to serve as collateral on a loan.
Such liens influence whether and when a lender will loan money to you. For example, if you own a retail shop and a lender has filed a UCC lien on the fixtures in your retail space, you can’t pledge the fixtures as collateral on another loan until you pay off the first.
The credit report will also show other legal filings, such as business bankruptcy judgments, tax liens, and accounts that have been placed into collections, typically after 90 days delinquent. Having legal judgments against you or overdue accounts can reveal financial distress and make creditors hesitate to work with you.
Business Credit Score
Based on the information in your report, each business credit agency will issue your business a score that predicts payment behavior. What counts as “a good score” depends on the bureau that’s reporting your credit. For more information on your business credit score, read our article on how business credit scores work.
A business credit report is a document that compiles information to assess the creditworthiness of a company. A business credit report will typically report on a company’s structure, industry, payment history and historical financial performance. Business credit reports are important because they, unlike personal credit reports, they can be seen by anyone, including your vendors, creditors, lenders, and partners.
NAV is an online company that gives instant access to your business and personal credit reports. They offer 2 free summaries of your business reports and also offer full business credit reports starting at $29.99. Visit them today: