Business Credit Score Range Details Decoded

Business Credit Score Range Details Decoded Credit Suite

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Business Credit Score Range Details Decoded

Published By Janet Gershen-Siegel at June 29, 2018

Business Credit Score Range Details Decoded Credit Suite>

Written by Janet Gershen-Siegel

Do you understand your business credit score range details? So you are presently in business, and you are striving to keep on top of your business credit scores. Or possibly you aren’t, and realize now is a good time to start. Or perhaps your small business is relatively new, and this is the very first time you’re doing this. You have probably asked these questions at least once: Are my scores any good? What do those business credit score range details mean?

Business Credit Scoring Range Details

Let’s look at the three business credit reporting bureaus and solve this mystery at long last.

Your Business’s Experian Company Credit Score Range Details

Experian’s Credit Score report includes things like a business credit score plus additional data, including account histories, payment trends, and public records. Experian commercial credit scores range from 1 to 100. In contrast to Dun & Bradstreet’s PAYDEX score and Equifax’s payment index, Experian considers various factors. They do not just look at payment histories. The details include:

  • Lines of credit your business has applied for in the last nine months
  • New lines of credit from the last six months
  • Years in business
  • Payment history in the past twelve months
  • Lines of credit in use in the previous six months
  • Collections totals in the past seven years
  • Percentage of available credit in use
  • Amount of payments one – 30 days overdue, or 31 days or more late
  • Amount of non-net 30 lines of credit. That means the payment is due in less or greater than 30 days

Normally, even businesses that use credit responsibly get a medium-low risk rating. As might be expected, older businesses will have an easier time getting a low-risk rating.

A great Experian score for your small business is 76-100.

Your Business’s PAYDEX Score Range Details

Dun & Bradstreet’s PAYDEX score ranges from 0 to 100. A PAYDEX score has a basis on payment data. It is either reported to the agency or is reported to data-gathering companies partnering with the bureau. D & B uses this data, plus a credit score and financial stress score. This is to recommend just how much credit a creditor ought to extend to your business.

Requirements

To have a PAYDEX score, you must file for a DUNS number by using Dun & Bradstreet’s web site. The number is free. Plus the bureau needs records of your payments with four or more vendors. Your business’s PAYDEX score shows if your payments are typically made without delay or ahead of schedule. As you might expect, a greater number is better. The scores work out as follows:

80-100: A low risk of late payments
50-79: A medium risk of late payments
0- 49: A high risk of late payments

Credit Rating

Your business’s credit rating ranges from 1 to 5. 1 is the best score. This matches your small business with other businesses with similar payment histories. The score shows how often those businesses tend to pay on time. It can help creditors recognize your business’s standing. However, it does not genuinely show the payment information from your small business.

Financial Stress Score

The financial stress score also goes from 1 to 5. It matches your business with other businesses sharing comparable financial and business characteristics. These similarities are in areas such as size or amount of time in business. It shows how often those comparable businesses tend to pay on time. As before, 1 is the best score. This rating is a more comprehensive evaluation of the business landscape, versus an analysis of your small business’s true payment history.

A good PAYDEX score for your business is 80-100.

Your Small Business’s Equifax Score Range Details

Equifax shows three separate business determinations on its business credit reports. These are the Equifax payment index, your business’s credit risk score, and its business failure score.

Equifax Payment Index

Much like the PAYDEX score, Equifax’s payment index, which has a scale of 100, shows how many of your business’s payments were made in a timely manner. These include both records from creditors and vendors. However, it’s not meant to predict future conduct. This is what the other two scores are for.

Equifax Credit Risk Score

Equifax’s credit risk score checks how likely it is your business will become severely delinquent on payments. Scores run from 101 to 992, and they assess:

  • Available credit limit on revolving credit accounts, e. g. credit cards
  • Business size
  • Proof of any non-financial transactions (e. g. vendor invoices) which are late or got a charge off for two or more billing cycles
  • Length of time since the earliest financial account was opened

Equifax Business Failure Score

Lastly, Equifax’s business failure score looks at the possibility of your business shutting down. It ranges from 1,000 to 1,600, reviewing these factors:

  • Total balance to total current credit limit average utilization in the last three months
  • How much time since the opening of the oldest financial account was opened
  • Your business’s worst payment status on all trades in the past 24 months
  • Confirmation of any non-financial transactions (e. g. merchant invoices) which are late or had a charge off for two or more billing cycles

So for the credit risk and the business failure scores, a rating of 0 means bankruptcy.

A great Equifax score for your business is:

  • Payment Index 0-10
  • Credit Risk score 892-992
  • Business Failure score 1400-1600

Takeaways

Keep your scores in line (these score range details should help) and good things will happen. Knowing business credit score range details helps. What frustrates you the most about business credit reporting?

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