Understanding Your Business Credit Report

Companies use personal credit scores to assess potential risk and trustworthiness when working with or lending to someone. Just as personal credit scores can play an important role in financing and business decisions for individuals, there are detailed credit reports for businesses too.

Multiple credit reporting bureaus provide their own version of a business credit score. Like personal credit scores, they indicate the potential risk for lenders or partners seeking to do business with you.

What is a business credit report?

Business credit reports typically involve a summary of essential business information and a score that indicates the calculated potential financial risk of working with the company.

While each reporting agency has their own unique business credit scores, most focus heavily on how long it takes for businesses to pay outstanding financial obligations. If you pay on time or early, you’ll have a high score that indicates minimum risk; if you pay outside an invoice’s agreed-upon terms, your score will be lower. Some scores also assess the financial standing of a business overall, evaluating the potential risk that the business may go bankrupt within a certain time period.

Business credit reports may be used in any of the following situations:

• Lenders may use credit reports to approve and determine limits of funding.
• Vendors may use business credit scores to negotiate payment terms and consider the potential risk of non-payment.
• Insurance companies may pull business credit scores to assess risk and calculate pricing.
• Investors may acquire credit scores to check the longstanding health of a company before investing or during an acquisition.
• Commercial real estate companies might use credit scores before agreeing to a lease.

What’s in a business credit report?

Most credit bureaus will have credit profiles or reports that include the following business information:

• Business names, including doing business as (DBA) names
• Key business information, including location(s), year founded and names of registered agents
• Public records, which may include bankruptcy or judgment information
• Business credit scores calculated by the agency you’re purchasing the report from

Understanding business credit scores

Each credit bureau has their own way of calculating business credit scores, with some bureaus like Equifax even having multiple different scores in a single report.

Dun & Bradstreet

The Dun & Bradstreet (D&B) PAYDEX score is a business credit score that is based on how often businesses pay its vendors and suppliers on time. PAYDEX scores range from 1 to 100, with higher scores indicating on-time or early payments.

A “good” PAYDEX score would be 80 or above, which demonstrates that the business typically pays its suppliers ahead of an invoice’s due date. Your PAYDEX score only accounts for payments and invoices reported to D&B, and more emphasis is given to large or recent transactions.

How to get your Dun & Bradstreet business credit report

To check your PAYDEX score, you must have a D&B’s Credit Insights subscription, which allows you to view your PAYDEX score along with several other business credit scores. Subscription pricing starts at $49 per month.

Experian

Experian’s Intelliscore Plus uses statistical techniques and a business’s transaction history to predict the likelihood that the business’s payment performance will either become delinquent or that the business will go bankrupt over the next 12 months. Experian accounts for trade, collection, public record and data specific to the business and industry in their calculations.

Intelliscore Plus scores range from 1 to 100, with scores of 76 and higher being considered low risk scores.

How to get your Experian business credit report

You can purchase your Experian business credit report on their website. You can purchase a one-time copy of your credit score report for $39.95, which includes your Intelliscore rating. Some businesses may prefer to purchase the Business Credit Advantage product, which is $189 annually and includes unlimited access to score updates and improvement suggestions. Both offer quick access to your report.

FICO

FICO’s Small Business Scoring Service (SBSS) assesses the risk of U.S. small business credit applicants, prioritizing data accuracy while still providing quick turnaround times. The credit score ranges from 0 to 300, and is commonly used by lenders evaluating risk for individual applications.

The Small Business Administration (SBA) uses FICO’s SBSS in their assessment for 7(a) loan applications, making it a particularly important score to track if you’re applying for this type of funding. The minimum SBSS score for 7(a) Small loans is currently 155, though many other lenders may require minimum scores of 160-180.

How to get check your FICO SBSS score

Because the FICO SBSS score offers variable models that allow potential lenders to prioritize different factors over others, your score may fluctuate. You can access your SBSS score if lenders supply it after they pull it when reviewing your loan application.

You can also purchase a Nav Prime subscription with the FICO SBSS score add-on to monitor your score. A Nav Prime subscription costs $49.99 per month, and the SBSS score add-on costs an additional $10.00 per month.

Equifax

Equifax small business credit reports use public information and payment data reported by lenders to summarize key information for businesses. These reports include your company profile, public records, payment trends and a credit summary.

Equifax’s business credit reports feature three different scores:

• Business credit risk score: Predicts the likelihood that a business will become delinquent over the coming 24 months, with lower scores representing higher risk.
• Business failure score: Indicates the likelihood of the business failing through formal or informal bankruptcy over the coming 12 months, with lower scores indicating a higher chance of bankruptcy.
• Business delinquency score: A delinquency score aims to predict the likelihood of a business being late on payments or filing for bankruptcy. The score ranges from 0 to 999, with a history of bankruptcy leading to an automatic 0.
• Payment index: Based on a business’s past and current payment history and demonstrates promptness of payment. Scores can range from 1-100, with scores of 90 or higher indicating that the business consistently pays on time.
• Other scores: Equifax has many ways to score both businesses and the people who own them, and they launch new scores and reports regularly. If you’re seeing a report after being denied credit, the information you see will depend on the exact report the lender ordered.

How to get your Equifax business credit report

If you recently applied for credit and were denied, you can email [email protected] to request a copy of your report.

Unfortunately, like the FICO SBSS score above, there’s no easy way to get a copy of your Equifax report without applying for credit. You can get a copy of your business delinquency score if you pay for a Nav Prime subscription.

Can I check my business credit score for free?

Unfortunately, there are costs required to access your business credit score, as no reporting bureaus offer business credit scores for free directly. While the Fair Credit Report Act (FCRA) allows you free access to your personal credit score, it doesn’t apply to business credit scores.

Some companies allow you to purchase standalone reports, while others may require monthly subscriptions to access updated business credit reports.