What's the 411? Understanding your business' credit score

A business #credit #score is an important aspect of your business’ financial life. However, many business owners don’t know their business credit score or how to access the credit report. Here’s a breakdown of the importance of understanding and keeping track of your business credit score.

What is a business credit score?

Similar to your personal credit score, your business credit score is a numerical representation of your company’s creditworthiness or financial stability. There are two important differences between your business and personal credit score. First, there is no federal law governing business credit reports. This means that anyone can access your business credit information with or without your permission. Secondly, it costs money to pull your business credit report and you can’t freeze your business credit report.

Why it matters?

Knowing your company’s credit score is important because it increases the borrowing power for any financing options. Other good reasons for knowing your credit score includes lower rates on insurance policies and separation between your business and personal finances to keep track of business expenses for tax purposes.

How to check your business credit score?

There are many ways to find your business score but we’ll only focus on the four main ones. The Dun & Bradstreet Paydex ranges from 0 to 100 and is solely based on the promptness of payments. #Equifax Business report includes three different scores inside a single report: the tradition credit risk score (ranging from 100 to 992 and focuses on your company’s credit history), the payment index (ranging from 0 to 100 and focuses on payment history to creditors), and a business failure score (ranging from 1,000 to 1,880 and determines the risk of a company going under or dissolving). The #Experian Intelliscore Plus, ranging from 0 to 100, considers whether payments are made on time or not, average credit utilization, and derogatory marks on your account. The #FICO SBSS is one of the newest companies to offer business credit scores. It ranges from 0 to 300 and is based on a combination of factors including business and personal credit history.


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