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Business Credit Scoring 101… How the Business Reporting Agencies rate your Business

Published By Janet Gershen-Siegel at August 15th, 2017

So, what affects business credit score? And how is business credit score calculated? The answers may surprise you, but the first thing you will need to know is where to establish business credit. Because any discussion of business credit scoring goes hand in hand with getting business credit in the first place. Without business credit, your business credit score is very low, if it exists at all. That should not come as a great shock to anyone.

Getting Business Credit

Before we get started, recognize that business credit takes the form of credit cards (Visa, MasterCard, etc.) but also trade credit. Trade credit is when you get what is essentially an advance of vital goods and services and extra time to pay for them, from a vendor you regularly do business with. For example, your business might always get coffee from a particular café. If you always pay your bills on time, ask for trade credit next time. The café might love the idea, seeing as that gives them a competitive edge with you over similar area businesses.

Business Credit Scoring

For the top three credit reporting bureaus, similar variables come up over and over again. As a result, working harder to improve one factor will help to improve your business credit scores across the board.

Dun & Bradstreet

We start with D&B as they are the oldest. Dun & Bradstreet cares about the following factors, among others.

Delinquency Predictions

D&B makes use of predictive modeling in order to try to figure out if your business will be late with its bill payments. They use historical information and then compare it to a future event. For example, if your small business is a pet store, your history of paying for crates is probably pretty indicative of how well you will pay for feed. The purchases might not be fully identical, but they are pretty similar in size and scope. However, that won’t be such a great predictor of how well your business will pay a mortgage on a new store location. For that, the predictive model will be more accurate if it looks at your company’s history of paying rent or a previous mortgage.

Financial Stress Predictions

Dun & Bradstreet generates various numbers by not only looking at your company’s data, but also the data of similar such businesses. Similarity is defined by looking at type of business, how old the compared businesses are, their physical locations, the industry, the number of employees, etc. A company in Dayton, Ohio that makes widgets and employs 50 people, and has been in the business for ten years, can be productively compared to a widget company in Cleveland with 60 employees that’s been in business for eight years. But neither of them can intelligently be compared to a bakery in Sausalito, California with only two employees that has been in business for over a century.

Outside Information

D&B also looks at publicly available information such as bankruptcy data, liens, collections, and any lawsuits pending against your company.

Credit Utilization Percentage

Dun & Bradstreet also looks at your credit utilization percentage. This is just a simple ratio of utilized credit (that is, what you’ve spent) as a percentage of overall available credit.


Similar to D&B, Experian wants to know about your previous payment history in an effort to predict the future. In order to try to do this with any bit of accuracy, Experian, too, relies on comparing your company to similar organizations.

They also look at payments to vendors and lenders, including trade payments (that’s the trade credit we talked about earlier).


Equifax adds a look at your financial account highlights for the most recent 36 month period. They also make sure to look into DBAs and any other related business enterprises to see if they impact your score.

Common Ground

All three big credit reporting bureaus, in essence, want to:

  • Make sure you’re paying your bills on time
  • Make sure you’re not borrowing more than you can comfortably pay back
  • Make sure you don’t have too many outstanding judgments, liens, and other demands for funds which are outside of those from creditors

Business credit scoring isn’t quite so mysterious after all.

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