Business Credit Scores Ultimate Guide

Business credit scores are numerical ratings that use past financial performance to predict future company behavior. Created by Dun & Bradstreet (D&B), Experian, Equifax, and FICO Small Business Scoring System (SBSS), these scores highlight your company’s ability to responsibly manage business debt to lenders, creditors, and potential partners. Although business scores vary across credit reporting agencies, they typically range from 1 to 100, with 100 being the best score possible.

Your business credit scores are used primarily to qualify you for business loans and business credit cards, so it’s important to check your business scores regularly. You can visit any of the above credit bureaus to see your business ratings or get your personal and business credit scores for free using NAV.

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How Business Credit Scores Work

The four major credit scoring agencies—D&B, Experian, Equifax, and FICO—collect information, including when you started your company, credit lines, and payment history to generate business credit scores. Unlike personal credit scores, anyone can view your business credit ratings, so it’s essential to maintain good business credit.

Business credit scoring agencies produce a variety of scores that evaluate company risk, but there are five business risk credit scores that are important to pay attention to. Business credit ratings usually range from 1 to 100, with 100 indicating a company is least likely to become delinquent or insolvent.

The higher your score, the better it is. A score of 80 is considered good, but a 70 rating is still decent. However, having a business credit score in the upper 20% of the range, you’ll typically have a good score even if the credit scale doesn’t range from 1 to 100. To get a perfect score in most business score models, business owners must pay their tradelines early, not just on time.

How Business Credit Scores Are Used

Much like personal credit scores, business credit scores are an important representation of your company’s financial performance and payment history. Vendors, creditors, and lenders alike use these scores to assess the risk and overall creditworthiness of your company. This also applies to potential partners interested in working with you or joining your company because anyone can view your business credit scores.

The better your business credit rating, the more likely you are to qualify for business financing. You’re also more likely to receive favorable terms like lower interest rates and larger loan amounts because creditors see your business as a lower risk. If your company doesn’t have good credit scores, it’s crucial to focus on improving and building your business credit.

How Business Credit Scores Are Calculated

Business credit scores are based on company information, industry, payment history, credit utilization, and financial performance. The three major business credit bureaus－ D&B, Experian, Equifax－ also collect data reported by vendors and lenders. With a low credit utilization ratio and a history of timely payments, you’re more likely to maintain a good business credit rating.

Common Business Credit Scores

There are five business credit scores that carry the most weight for businesses. While two credit scores from D&B and Experian range from 1 to 100, Equifax’s Business Credit Risk and Business Failure scores range from 101 to 992 and 1,000 to 1,610, respectively. The FICO SBSS score is also a bit different, with its scores ranging from 1 to 300. A higher rating represents a lower risk of delinquency or failure for each business score.

Although there are the five most commonly used scores, each credit scoring agency offers a variety of additional ratings and business indicators. We focus on the principal business risk scores in this article because these scores are most likely to be reviewed by business creditors and lenders.

1. Dun & Bradstreet PAYDEX Credit Score

The D&B PAYDEX score is the most commonly used business credit bureau for business information and ratings. Based on the previous two years of tradeline history, this score showcases a company’s history of timely payments. The PAYDEX score ranges from 1 to 100, with a higher score indicating a company is most likely to pay debts on time. A business needs at least two different vendors that report at least three pieces of trade to generate this score.

D&B PAYDEX score ranges from 0 to 100.

D&B also has four other business credit scores. The D&B rating measures financial strength based on company statements, size, and age. The Delinquency Score predicts the likelihood of delinquent payments based on the next 12 months of invoiced payments. The Viability Rating, also a predictor score, shows the likelihood a company will go out of business or bankrupt. And finally, the failure score predicts the likelihood of financial issues in the next 12 months.

2. Experian Intelliscore

Experian’s Intelliscore uses more than 800 variables to assess a company’s risk of default or payment delinquency. This score is used most commonly by banks and lenders and provides insights into a company’s payment trends, public record filings, collections, and general business background. Scores range from 1 to 100, with 76 or higher being considered a good score.

Experian Intelliscore ranges from 1 to 100

Unlike D&B’s PAYDEX score, Experian’s Itelliscore uses a combination of commercial and the business owner’s personal history to create its score. Blending consumer and commercial data can better indicate a small business’s risk. However, this also means that your personal finances will affect your business scores with Experian and other business credit bureaus that use this method.

3. Equifax Business Credit Scores

Equifax has two common business credit scores: Business Credit Risk Score and Business Failure Score. The credit risk score evaluates the likelihood that a company will become severely delinquent on its future payments while the failure score measures the likelihood a company will become insolvent in the next 12 months. These scores are based on public business and industry information as well as past financial performance. Equifax also considers your credit utilization and length of credit history to calculate both scores.

Equifax provides two important business credit scores.

Equifax also offers a Payment Index, which ranges from 1 to 100. This score is a valuable indicator of how timely payments are being made, based on the previous 12 months of payments. Unlike Equifax’s risk scores, this number evaluates past payment performance compared to its industry-standard and does not seek to predict future behavior.

4. FICO SBSS Credit Score

FICO is technically not one of the three major credit bureaus. However, it’s one of the most common scoring models FICO provides the FICO SBSS Credit Score based on information gathered by D&B, Equifax, and Experian. This score ranges from 1 to 300 and is most commonly used to approve Small Business Administration (SBA) loans. You’ll typically need a minimum score between 140 and 160 to be considered for an SBA loan.

FICO SBSS ranges from 1 to 300.

Because FICO doesn’t collect its own information, the best way to establish and build this credit score is by focusing on the other three credit bureaus and their business ratings.

How to Check Your Business Credit Score

Business credit scores aren’t typically free. More often than not, you will need to purchase your scores from one of the three leading credit reporting agencies—D&B, Experian, and Equifax. You’ll need to visit these credit reporting agencies to view monthly subscriptions as well as one-time-report viewing options.

You typically get a “free” credit score as part of a more extensive business credit report subscription. Subscription-based credit scores also usually include business credit monitoring, allowing you to keep up-to-date with any business credit changes. However, not all businesses have credit scores, but you can do a free company search on the provider’s website to see if your business has a score.

Frequently Asked Questions (FAQs)

We covered a lot of information in this article, but there are usually additional questions that we didn’t get to address. We’ll answer those commonly asked questions here. And, if you have any questions of your own, please feel free to leave a comment below.

What’s the most commonly used business credit score?

Although D&B, Experian, Equifax, and FICO SBSS all provide business credit ratings, D&B is the most commonly used business credit score. However, Experian’s Intelliscore is also popular among banking institutions and lenders.

Will my personal credit affect my business credit?

Because some business credit scores are based on both consumer and commercial financial information, your personal credit can affect your business credit. To keep your business credit intact, you should maintain a personal credit score of at least 670 and separate your business and personal finances as much as possible.

What is a good credit score for a business?

Business credit score ranges vary depending on the credit reporting agency, but generally range from 1 to 100, with a score of 80 or higher being a good score. As with personal credit scores, the higher your number, the more likely it is you’ll get favorable terms like lower interest rates for loans and credit lines.

Bottom Line

Business credit scores assess company creditworthiness by evaluating past payment behavior. Higher scores show others that your company is financially responsible and can meet its future payment obligations. To secure business funding and get the best terms on loans and business credit cards, you’ll need to monitor your business credit scores as carefully as you monitor your personal scores.