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Here’s Everything You Need to Know to Understand Your Business Credit Score & Even Improve It

There’s no better time than National Credit Education Month to educate yourself on the importance of your business credit scores. So, we’re here to outline for you how to check your business credit score, the best resources available and even how to improve your score.

What is a Business Credit Score? 

A business credit score is different from a personal credit score in that it indicates a company’s eligibility to receive financing, for example. The score varies based on the credit company providing it. 

A business credit score is determined by a number of factors, including: 

  • Payment History
  • Age of Accounts
  • Debt and Debt Usage
  • Industry Risk
  • Company Size

That score is typically one of several items provided on an overall business credit report. According to the U.S. Small Business Administration, the following financial items can also be found on the report:

  • Company Information (Employees, Sales, Ownership & Subsidiaries)
  • Historical Business Data
  • Business Registration Details
  • Government Activity Summary
  • Business Operational Data
  • Industry Classification
  • Public Record Filings
  • Payment History & Collections
  • Number of Accounts & Details

Why Monitoring Your Business Credit Score is Important

A business credit report and score can impact your business’s financial future. The score determines the amount of credit your business can obtain, the terms of repayment, interest rates and insurance premiums. 

Similar to how you monitor your personal credit score and personal finances, it’s essential to monitor your business’ score to ensure there are no red flags that can damage your business’ reputation, loan eligibility and more.

How to Check a Business Credit Score

Although there are many free personal credit report resources available, there are fewer unpaid options for checking a business credit score. And if you do opt for a free version, it’s unlikely you’ll receive all of the items typically available on such a report. If you’re interested in a comprehensive review of your business, it’s best to go with one of the following companies that offer thorough and legitimate business credit reports:

FICO Scores

FICO’s Small Business Scoring Service ranges from 0-300. The higher the score, the better the financial standing. The minimum score to pass the Small Business Administration’s pre-screen process is 140, according to Nav.

Dun & Bradstreet PAYDEX Scores

The Dun & Bradstreet PAYDEX score ranged from 1-100. The higher the score, the greater your business will look in the eyes of lenders. This score is determined by payment performance. If you pay your bills on time, your business will receive a higher score. 

Experian Business Scores

The Experian Intelliscore Plus scores range from 1-100, with the higher scores delineating lower risk, reports Nav. The resource divides all risk scores into five classes: Low (50 and higher), Low-Medium (40-50), Medium (30-40), High-Medium (20-30) and High (1-19).

What is a Good Business Credit Score?

A good business credit score means your business has a strong history of business credit, has low debt and makes timely payments to creditors. If you’re a small business owner interested in improving your credit score to make your company more appealing in the eyes of lenders, landlords and business credit card companies, you can start by paying your bills and credit cards on time, lowering your credit utilization ratio (credit used compared to credit available), increasing positive pay experiences and disputing any errors on the credit report.

AVANA CUSO, a commercial real estate loan provider that partners with credit unions and investors across the United States, can assist you in checking business credit scores and determining eligibility for our various loan products and services

Contact AVANA CUSO today!