Business Credit Scores & Reports

October 13, 2023 Gerri Detweiler

Strong business credit scores can be key to getting your company approved for trade credit and financing. But they can be very different than personal credit scores. Understand how they work and how to build strong business credit.

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4 Reasons to Check Your Business Credit Scores

Research by Manta and Nav found that 72% of business owners don’t know their business credit scores. If you’re one of those who don’t know their scores, here are four great reasons to check your business credit on a regular basis:

Mistakes happen. Your business credit may get mixed up with that of another business, or one of your vendors or lenders may report incorrect information. If you don’t check, you won’t know.
Credit scores change. Every time new information is reported by your lenders and vendors, your credit reports— and scores— may change.
Fraud can occur. Business credit fraud or identity theft is a growing problem and may result in negative information on your reports. Monitoring your credit can alert you to suspicious activity.
Get better financing. The Nav American Dream Gap report found that business owners who understood their business credit were 41% more likely to be approved for financing.

Your lenders, vendors and even your competitors may check your business credit without your knowledge. Others may be checking your credit— shouldn’t you?

What is a Business Credit Score?

Personal credit scores rank creditworthiness of individuals, business credit scores do the same for businesses. Personal credit scores range from 300 to 850. Business credit scores range from 0 to 100. Major business credit reporting agencies Dun & Bradstreet, Experian, and Equifax produce business credit scores and reports. FICO scores for small businesses are known as “FICO SBSS.”

If you try to compare business credit to personal credit, you’re likely to get frustrated. That’s because business credit scores differ from consumer credit scores in some key ways:

Credit Score Ranges: Personal FICO scores range between 300 to 850; business credit scores typically range between zero to 100. Paying on time to lenders and/or creditors is the best thing you can do to establish a good business credit score.

Free scores: There are over 138 places where consumers can check and monitor their consumer credit scores for free. But free business credit scores are available from a very limited number of sources, such as Nav.

Access: Anyone can check a businesses’ credit scores, unlike consumer scores which are restricted to anyone with a “permissible purpose” under federal law.

Accuracy: A study published in the Wall Street Journal found as many as 25% of business credit reports may contain errors or are missing key information. If the credit report contains mistakes, the scores produced may not accurately reflect the risk of the business.

Factors That Determine Business Credit Scores

The following factors may be used to calculate business credit scores. Each scoring model is different, though, so some of these factors may not carry much weight, or may not be used at all.

Payment history
Age of credit history
Debt and debt usage
Industry risk
Company size

By far, the most important factor when it comes to business credit scores is payment history: does your business pay its bills on time? Some credit scores are almost exclusively calculated based on payment history.

Business credit score	Score range
D&B PAYDEX®	0 – 100
Intelliscore℠ Plus from Experian	0 – 100
FICO® LiquidCredit® Small Business Scoring Service℠	0 – 300
Equifax Business Delinquency Risk Score	224 – 580

These are some popular business credit scores. Just as there are many different versions of consumer credit scores, though, there are other business credit scores besides these. Just by checking these scores and making sure they are strong, you’ll be ahead of most business owners who never check or work on theirs.

Intelliscore Plus℠ from Experian

With the Experian Intelliscore Plus℠ scores range from 1 to 100. A Higher scores indicate lower risk, so as a business owner, you want to aim for a higher score.

There are over 800 variables that can go into these scores, including tradeline and collection information, public filings, new account activity, key financial ratios and other performance indicators. But the bottom line is paying on time and managing debt well will help build a strong score.

Note: Experian offers a version of Intelliscore Plus that can evaluate data from the owner’s personal credit report as well as business credit.

Learn more about Experian Business Credit Reports here.

FICO® LiquidCredit® Small Business Scoring Service℠

FICO’s Small Business Scoring Service (SBSS) rank-orders applicants by their likelihood of making payments on time. The score ranges from 0 to 300. The higher the score, the better. The scoring can use both personal and business credit data and other financial information. A strong history of business credit with timely payments to vendors and suppliers may help boost your SBSS score. The FICO SBSS score will be used for term loans, lines of credit, and commercial loans up to $350,000 from the Small Business Administration (SBA). The minimum score to pass the SBA’s pre-screen process is currently 140.

How Business Credit Scores Are Used

Lenders and other creditors need a means of determining how well your business repays debts before they will approve you for financing. This is where business credit scores can come in. Higher scores indicate to creditors that your business is more likely to pay bills on time, thereby improving the odds that you can obtain financing. Lenders can check your company’s business credit reports to get more detailed information about your business’s financial history, and business credit scores serve as shorthand evaluations. Here are three other ways your business credit scores may be used:

1. Determine your borrowing power.
Your business credit report and score can determine how much financing you are able to secure.
2. Determine your rates on business insurance.
Some insurance providers evaluate a business owner’s credit as well as the business’s credit to determine rates on commercial insurance.
3. Get more time to pay.
Vendors and suppliers may look at a business’s credit reports or scores to decide how long to give the business before payment is due for goods and services. Net-30” terms would mean your business has 30 days to pay, while net-60 terms gives you 60 days to pay. Securing longer terms on your terms with suppliers is a great way to improve cash flow.

How Can I Get Free Business Credit Scores?

As a consumer, you probably have a few different sources for your free credit reports and scores (we found 138+ places you can get your scores for free). But free business credit reports are another story. Many business credit reporting agencies require you to pay to review the information they have on your business.

Business owners can, however, access information about their Experian, Equifax, and Dun & Bradstreet business credit reports with a Nav account. Nav provides business credit grades for each score as well as summary reports, your personal credit score from Experian, and free tools that may help you build business credit. (No credit card required.)

See My Scores

How Can I Improve My Credit Score?

Building business credit may be a challenge. For example, not all the bills you pay show up on your credit reports, and accounts that don’t report won’t help you build credit. One possible way to build business credit is to open accounts that report to business credit, such as vendor accounts and the right business credit cards.

Nav can help you gain insight for the next steps in business credit. See how lenders view your business data with personal and business credit scores.

Business scoring models vary by bureau. Credit score improvement strategies do not guarantee results and will vary based on a business’ scoring factors.

Add accounts you already pay to your business credit reports.
Pay accounts that report on time or before they’re due.
Keep debt under control. If possible, avoid maxing out credit lines.

Business Credit Reports

Just as you’d view your personal credit report to check your financial history, the same information can be reviewed for your business. That’s because the minute you start a business, credit bureaus begin to develop a business credit report on your company. They do this by scouring public records and other financial data.

Then, when you receive small business loans or a line of credit — sometimes called trade credit — information about your payment history is compiled by one or more business credit reporting agencies, including Experian, Equifax and FICO and turned into a business credit score.

The Basics of Business Credit Reports

Your business credit report should only contain debts for which your business is liable. Often those are accounts you opened using your company’s federal tax identification number — also known as an employer identification number. Any consumer credit accounts that you obtained for personal use should not be listed on the report.

Companies don’t have to report accounts to business credit, though. Some of your trade credit or business credit accounts may not be listed on your business credit reports.

How Business Credit Is Used

When you apply for future business credit, potential creditors and lenders will view the report to determine your company’s creditworthiness. They will use the information to evaluate how well your business repays its debts, and negative marks can cause you not to get approved, or lower the amount of credit they will extend, or limit the terms under which that credit will be given.

Besides lenders and creditors, several other parties may be interested in reviewing a business credit report. Business insurance companies, for example, assess a business’s report as part of the underwriting process. Customers and other businesses that are being considered for a joint venture or partnership may also review your company’s credit history before working with your business.

Why Separating Personal and Business Credit Matters

Trade credit reporting is beneficial for helping you separate your business and personal finances, which is particularly advantageous in regard to credit. A business credit report offers a clear view into the financial standing of your business, providing you with a clean report of the company’s credit inquiries, lines of credit and delinquencies. This streamlined information makes it easier for fraud monitoring and for lenders to accurately assess creditworthiness (see the importance of business credit monitoring).

Furthermore, separately listing business credit information protects your personal credit standing. Your company will typically have more annual inquiries and for larger lines of credit. With combined information, these inquiries could hurt your credit score, but a trade credit report gives your business its own history to list your business’ credit activity.

Get Your Free Business Credit Check

Doing the right things to build your business credit profile is one of the most important items you can take as a small business owner. Doing so opens up financing opportunities and business relationships that make it a hell of a lot easier for you to run and grow a business.

Ready to see your credit data and start building better business credit? Check your personal and business credit for free (no credit card required).