The Experian Intelliscore Plus is a business credit score banks, lenders, and other companies use to evaluate your company’s creditworthiness. This business credit score predicts the likelihood your company will default or miss a payment and ranges from 1 to 100, with 100 being the best score possible. Maintaining a high Experian business credit score will increase your chances of approval for loans, credit cards, and business transactions.
What Is Experian Intelliscore Plus?
Similar to the Paydex Score for Dun & Bradstreet and the Business Failure Score for Equifax, the Experian business credit score classifies a company’s risk of a payment default. Experian bases this score primarily on your company’s financial history, along with several other factors that may indicate any unwanted financial risk.
Experian currently has two versions of its Intelliscore Plus scoring model—V1 and V2. Experian doesn’t disclose the formula it uses to calculate credit scores, so it’s difficult to pinpoint how the scoring models are different. However, the ranges for both versions remain from 1 to 100, even though the factors used to calculate the score have changed.
How Experian Intelliscore Plus Works
The Experian business credit score works by using your company’s financial activity to predict your ability to pay back financial debt, like business credit cards and loans. Experian doesn’t disclose the weighted factors used to calculate its business credit score, but there are a few factors that we can conclude are most likely in the score. We’ll break this scoring model down by looking at what goes into calculating the score, its range, and how it’s applied.
How It’s Calculated
Experian’s business credit score uses your company information as well as your personal credit to produce a comprehensive credit score. By including the business owner’s personal credit information, Experian can better predict a company’s risk level. It uses the following information to determine your business credit score:
- Business information: This includes general company information like the age and size of your business along with the industry your company operates in.
- Public filings: Experian considers any bankruptcies and public filings, including liens and court judgments, when calculating your score. Negative judgments can lower your business credit score significantly.
- Financial history: Your company’s payment history with vendors, lenders, and collectors are also included in your score. Payment history is typically weighted heavily in all business credit scores, including the Experian Intelliscore Plus.
- Credit utilization: Your company’s total available credit compared to overall credit use, otherwise known as your credit utilization, is a vital part of credit calculation.
- Personal credit: The Experian Intelliscore Plus score uses the personal credit score of the business owner to provide a comprehensive representation of your business risk.
With more business credit scoring models like Experian and FICO Small Business Scoring Service (SBSS) relying on your personal credit, it’s become more crucial than ever to maintain high personal credit scores. This means that your personal credit scores can account for more than just your personal finances. Plus, if your company has no business credit, Experian will use your personal credit to produce a business credit score instead.
Experian Business Credit Score Range
Experian’s business credit score ranges from 1 to 100, with 100 being the best possible score and indicating the lowest risk of defaulted payments. Generally, an Experian credit score of at least 76 is considered low risk and most desirable to lenders. While scores that fall within the 51 to 75 range are considered low to medium risk, they still have appeal and decent success rates.
Medium risk scores from 26 to 50 are estimated to have only a 10% failure rate, while scores between 11 to 25 average nearly double the failure rate. However, nothing looks worse to lenders than the business scores ranging from 1 to 10, which fail over half of the time. Although, what’s considered a good or acceptable score is ultimately up to the company evaluating it.
Although the Experian Intelliscore Plus V1 and V2 models have the same score range, Experian uses different analytics and financial markers to determine your score in each version. That means your credit score may change depending on the version being used.
What It’s Used For
Lenders, vendors, and investors use the Experian business credit score as a resource to review a company’s financial risk. So, if your business needs a loan or credit line, this credit score could be the tool your bank uses to evaluate your creditworthiness. Because this score is used to approve you for different business financial products, your best bet is to keep a sharp eye on your business credit and check your scores regularly.
Checking Your Experian Intelliscore Plus Score
You can check your business credit score directly on Experian’s website. You’ll have the option to choose between monthly or annual subscriptions or one-time credit score reports. Prices start at $39.95, but NAV also offers Experian business credit scores along with your personal credit scores for free through its website.
How to Improve Your Experian Intelliscore Plus Score
You may not have the best business score. However, there are ways you can improve your business credit, and your personal credit has a lot to do with it too. Of course, responsible practices like making payments on time will help, but there are also other ways to improve your Experian Intellliscore, including checking your credit report, improving your personal credit scores, reducing your credit usage, making your payments early or on time, and building business credit.
1. Check Your Credit Report
Before you can improve your business credit scores, you’ll need to review your business credit report. Checking your credit report will highlight areas of improvement like defaulted payments or too much credit usage.
Plus, you’ll be able to see any incorrect information that appears on your credit, including miscategorized company information or vendor payments that don’t appear at all. You can dispute any inaccurate information on your credit report. Removing errors from your report can do wonders for your Experian business credit score.
2. Improve Your Personal Credit Scores
Experian uses a blended scoring model for its business credit scores, so your personal credit score is factored automatically into your business score. Since the Experian Intelliscore Plus model is so closely tied to your personal credit, it makes sense that improving your personal scores can also raise your business scores.
You can improve your personal credit scores by paying down your debt and reducing your credit utilization ratio. With this model, you should see your business credit scores improve as your personal scores improve. Be sure to make your payments on time and limit the amount of borrowed credit you use.
3. Reduce Your Credit Usage
Like with your personal credit scores, your company’s credit utilization accounts for a large portion of your business credit score. It’s a good practice to use less than 30% of your total available credit. Any higher than that, and you’ll need to pay down your credit balances as quickly as possible to improve your business credit scores. The quicker you reduce your credit utilization, the faster your scores will rise.
4. Make Your Payments Early or On Time
The Experian Intelliscore Plus score evaluates payment default risk, so making your payments on time will lower your risk factor and improve your credit scores. Timely payments demonstrate to potential lenders that your company is trustworthy, stable, and likely to handle debt responsibly. Early payments also show creditors that you’re even less likely to miss a payment and your company looks more reliable overall.
5. Build Business Credit
If you haven’t already, it’s in your best interest to build business credit. Experian uses your personal credit in addition to your business credit to calculate your Experian business credit score. So, if you haven’t established business credit with other bureaus like Dun & Bradstreet, then Experian will rely solely on your personal credit.
Because your personal credit is often affected by your nonbusiness debt obligations, personal medical bills, and other factors, it isn’t always the best reflection of your business’s risk to lenders. By building business credit, you’ll establish a clear separation between your personal and business finances.
The Experian Intelliscore Plus score assesses the financial risk for a company. Your business credit score is based on your company’s payment history to creditors, its industry, and credit usage—including your personal credit. As with personal credit scores, you can improve your Experian business credit score by reducing your credit utilization, making timely payments, and monitoring your business credit reports regularly.