The Experian Intelliscore Plus℠ Credit Score Explained

by Gerri Detweiler

January 13, 2020

For many consumers and business owners, the term “credit score” is often shrouded in mystery. What is it? How is it created? How can I improve my credit score? Individual consumers typically find that much of their borrowing power hinges on the FICO score, but what about a company? For small business owners, what credit score is important?

The truth is, any credit-related score should be on your radar for both your business and personal finances, but the Intelliscore Plus credit score, provided by Experian, one of the leading credit bureaus in the United States, is definitely a top contender for business owners to check, monitor, and understand.

What is the Intelliscore Plus Credit Score?

Quite simply, the Intelliscore Plus credit score is a statistically-based credit risk evaluation. The main purpose of Experian Intelliscore Plus is to help companies, vendors, investors, and potential commercial credit grantors make well-educated decisions about who they should or should not do business with. These entities, of course, don’t want to lend money to or get involved with a company that has a high risk of being unable to pay back financing. The score is an indicator of that level of risk

Much like a car dealership can use a consumer’s FICO score to quickly determine how much of a risk a potential customer may be in terms of being able to pay off the auto loan, the Experian Intelliscore Plus credit score, which is a numerical score that ranges between 1 and 100, can provide insight on how high-risk a business or business owner may be. If you plan to apply for a business credit card or lines of credit, lenders and suppliers may look at your score to determine your creditworthiness.

While there are three major business credit reporting bureaus (Dun & Bradstreet, Equifax, and Experian) in the US, this number is created and sold by Experian. The other agencies have their own proprietary credit scores—PAYDEX® for Dun & Bradstreet and Business Delinquency Score™ for Equifax are two examples. It’s a good idea to monitor all three, which you can do with Nav.

As with many credit scores, there are different versions of this score. Current versions include: 

• Intelliscore Plus
• Intelliscore Plus v2

One thing that’s unique about this score is the fact that it can be based on personal credit data, business credit data, or both. Intelliscore Plus often uses a “blended model” for newer businesses: it can evaluate the owner’s personal credit data as well as business credit data to calculate a credit score. For new businesses with no business credit history, only the owner’s personal credit data may be used to calculate the business’s credit score.

Intelliscore Plus Credit Score Range

The Intelliscore credit scores range from 1 to 100; the higher your score, the lower your risk class. Conversely, the lower your score, the higher your risk class and the harder you may find it to be approved for a loan or business credit card. The chart below outlines each Intelliscore Plus credit score range and its associated risk class and risk description.

How Is My Experian Intelliscore Plus Credit Score Calculated?

In the credit world, Intelliscore Plus is deemed to be one of the most reliable tools in effectively predicting risk. One of the ways Intelliscore Plus maintains this claim to fame is by identifying the key factors that indicate whether or not a business is likely to pay its debt, as well as its overall financial stability.

Experian pulls over 800 commercial and owner variables from public records, your credit file, and public filings to calculate Intelliscore Plus credit scores. The actual formulas for these scores, like all credit scores, are proprietary, so exact details of how each item impacts the score is not revealed. However, there are general guidelines that can help you understand what makes up a strong score. 

Those variables can be broken down into these key factors:

• Payment History: The credit bureaus call this “recency” but in easy-to-understand terms, it’s nothing more than your history of paying bills on time (or not). This includes the number of times your account(s) become delinquent, the percentage of accounts that are currently delinquent, and your overall debt balance.
• Frequency: Closely related to payment history, frequency factors in the number of times your accounts have been sent to collections, the number of liens and judgments you may have, and any bankruptcies related to your business or personal accounts.
  Additionally, frequency can include information about your payment patterns. Were you consistently slow or late with a payment? Did you start off paying bills late, but over time, decreased this behavior? These things will all be considered when calculating your score.
• Monetary: This particular factor focuses on your credit utilization. For example, how much of your available credit is currently in use? Do you have a high ratio of delinquent balances compared to your total high credit or credit limits?

If you’re about to start a business or are fairly new to this game, the list above may seem a bit overwhelming. If you haven’t started or don’t have a long history of business-based transactions, how will Intelliscore Plus rate you?

How Do You Improve Your Score?

While there is no one single concrete solution to improving your credit score, these strategies can definitely help you with that goal:

• Make Your Payments on Time
  As we just discussed, your payment patterns and history are a driving force in your overall credit score. Over time, paying your bills on or before they are due will help establish your business as one that pays its debts. Payment history is the single most important factor in business credit scores, and unlike personal credit, your report may indicate payments that are just one day late! (Learn more about how payment history affects your business credit.) Set up systems like autopay or payment reminders so you don’t miss due dates.
• Keep Your Debt-to-Income Ratio in Check
  The more debt you have, the more bills you have, and the less disposable income you have. Many credit scoring models evaluate debt by calculating a factor called “utilization” or “debt usage.” This factor compares your balances on accounts to their credit limits, or if a credit limit isn’t reported, the highest recent balance reported. If your business credit report shows your business is “maxed out” on accounts, then it will likely  be rated as a high credit risk.
  Keep your debts in check and consistently pay them down and/or off when you can.
• Use Business Credit
  I know what you’re thinking: “But you just told me to keep my debts low!” 

That remains true; however, opening and responsibly utilizing business credit accounts that report to major commercial credit agencies can help you extend your available credit and increase your credit score. Two easy ways to get started:

• • • Get a business credit card that reports to business credit bureaus 
    • Get vendor accounts that report to business credit bureaus
• Maintain Good Personal Credit
  By now, you’re aware that your personal credit is fair game when it comes to your Intelliscore Plus score if a blended score (which evaluates both personal and business credit) is used. Running a small business is tough work, but don’t let your personal finances suffer. Make sure you stay on top of your personal bills, avoid unnecessary credit inquiries, and refrain from sacrificing your personal credit for small business needs.
• Review Your Credit Reports
  Regardless of what your credit score is, it’s important that you remain diligent and review your personal and business credit report regularly. This can help you spot possible issues and stay educated on your own credit profile. (Get your free personal and business credit reports here).

Knowledge of Your Credit Situation is Power

Understanding how your Experian Intelliscore Plus score (and other personal and business credit scores) work, as well as regularly monitoring your Experian business credit report will ensure that you and your business are in a good place financially.

Even if you don’t currently need funding, keeping your credit score sparkling will open the door for business financing options down the road.

Looking for a business credit card that suits your small business needs? Check out our business credit card marketplace to see what you qualify for.

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