Understanding Business Credit Scores
A business credit score is a numerical representation of your company's creditworthiness, used by lenders, suppliers, and other entities to assess risk. Unlike personal credit scores (300-850), business credit scores typically range from 0 to 100, though some bureaus use different ranges.
Major Business Credit Reporting Agencies
The three primary business credit reporting agencies are:
Each agency uses different scoring models:
| Bureau | Score Range | Considered "Good" |
|---|---|---|
| Dun & Bradstreet | 1-100 | 80+ |
| Experian | 1-100 | 76+ |
| Equifax | 101-992 | 700+ |
Key Factors Influencing Business Credit Scores
- Payment History: Timely payments to creditors and suppliers
- Credit Utilization: The ratio of credit used to total available credit
- Company Size and Age: Older, more established companies often have better scores
- Industry Risk: Some industries are considered riskier than others
- Public Records: Bankruptcies, liens, and judgments
- Length of Credit History: How long you've been using business credit
How to Check Your Score
Step 1: Obtain Your D-U-N-S Number
Before checking your D&B score, you'll need a D-U-N-S number. This unique nine-digit identifier is free and can be obtained through the D&B website.
Step 2: Choose Your Method
Several options are available:
- Direct from credit bureaus (paid service)
- Through credit monitoring services
- Via lending partners or credit card companies
- Free credit report websites
Step 3: Review Your Credit Report
Look for:
- Accuracy: Ensure all information is correct
- Discrepancies: Report any errors to the credit agency
- Negative Items: Identify areas needing improvement
Cost Considerations
Typical costs include:
Single Report: $39-99
Monthly Monitoring: $29-199
Annual Subscriptions: $199-1,200+
Best Practices for Monitoring
"Prevention is better than cure" applies to business credit too. Regular monitoring helps catch and address issues before they become serious problems.
Implement these monitoring practices:
- Check scores quarterly at minimum
- Set up alerts for significant changes
- Review detailed reports annually
- Monitor all three major bureaus
Tips for Improving Your Business Credit Score
- Pay Bills on Time: Consistently paying bills on time is crucial
- Reduce Debt: Keep credit utilization below 30%
- Monitor Regularly: Check reports to catch errors and track progress
- Build Credit History: Establish credit accounts with suppliers
- Maintain Accurate Information: Keep business details current
- Work with Reporting Suppliers: Choose vendors who report payment history
Benefits of a Good Business Credit Score
A strong score can help you:
- Secure better lending terms
- Negotiate better supplier contracts
- Attract potential business partners
- Qualify for government contracts
- Obtain better insurance rates
- Enhance your business reputation
When to Seek Professional Help
Consider working with a credit repair specialist or financial advisor if you:
- Find significant errors
- Need to improve poor scores
- Are preparing for major financing
- Have complex credit issues
Remember that building and maintaining good business credit is an ongoing process requiring regular monitoring and responsible financial management.