Business Credit Reports And What They Mean For Your Company

Similar to personal credit scores, business credit scores are a measure of various factors and it can be advantageous to know about business credit reports for your business operations. Knowing your score can become especially important if you are considering applying for a loan.

Ranges Vary

Essentially, your business credit score measure how credit worthy your business is. There are numerous differences between your personal score and business credit scores. First of all, business credit scores are between 0 and 100, which is far different than personal FICO scores which range from 300 to 850. Depending on where you get your business credit report from, they provide other numbers about your business.

Personal Accounts and Paying For Your Score

Another crucial difference deals with data. Business credit reports often do not include any personal accounts, but just accounts dealing with your business. This becomes tricky with small business lenders who evaluate both your business credit and personal credit when considering you for a loan. Also, unlike personal credit reports which are often free from the consumer credit bureaus, you have to pay for your business report. In order for your business operations to continue running, this score is important to have. 

Dun & Bradstreet

Dun & Bradstreet uses a PAYDEX score to measure your business risk. This number is critical to know and constantly improve because it helps a lender decide how much credit to extend to you. Anything between a 0 and 49 signifies a high risk of late payments. Between a 50 and 79, is a medium risk and if you have anywhere between an 80 and above you have low risk of late payments. Dun & Bradstreet measure your business credit on a scale from one to five with 1 being the best score. 

Equifax

Equifax’s credit scale ranges from 101 to 992 and uses your company size, credit cards, how longer your oldest financial account has been opened and facts around non-financial transactions to measure your score. They also provide a business failure score which is a number to show how likely your business is to shut down. 

There are numerous places to get your credit report from including Dun & Bradstreet and Equifax. In order for your business operations to continue running smoothly, it is important to have a great business credit score to be approved for loans and other alternative financing options. Some of the major credit bureaus provide other numbers such as your business failure score.

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