Here are Corporate Credit Reports Made Simple
We’ve got corporate credit reports made simple for you.
Your best bet as a company owner is to stay on top of your corporate credit reports from PAYDEX, Equifax, and Experian.
There are three big credit reporting agencies for companies. And you really need to check all three of them on a regular basis. This is because they use moderately different yardsticks. So moving the needle for one can move the needle for both of the others. But that’s perhaps not as much.
Do not permit your small business credit scores to slide, as you must pounce on any mistakes quickly as you can. Plus pinpoint anything which is pulling your scores downward. And after that you need to take corrective action.
You can get your reports easily. And stay right on top of all three scores by following a few easy steps.
Corporate Credit Reports Made Simple Starts With Understanding Scores
Does your company have a terrific company credit score? Or it is any good at all?
Let’s check out the three business credit reporting agencies. Because corporate credit reports made simple means understanding your scores.
Dun & Bradstreet’s PAYDEX score of your business can wind up being among the main reasons why your small business obtains credit at all. D & B offers Credit Signal, which is a method to keep an eye on your credit score by having the reports come directly to you, for a cost. You may find the fee is well worth it to avoid the nuisances that can stem from letting this score slip.
And you will not need to develop and stay on top of the schedules and reminders you might need to stay up to date with if you don’t utilize it.
Alternatives to Credit Signal
Don’t want to make use of Credit Signal? No problem, as you can receive your PAYDEX report via D & B and, if need be, you can speak to their Customer Service department (this department exists as a part of Dun & Bradstreet itself).
Additionally, in order to review your PAYDEX report, check out what D & B provides, which is a sample report as well as some higher level support in the way to decipher it.
Your Small Business’s PAYDEX Score
Dun & Bradstreet’s PAYDEX score runs from 0 to 100. A PAYDEX score has a basis in payment information which is on report to the CRA. Or it is on report to data-gathering businesses partnering with the credit reporting agency.
D & B uses this data, as well as a credit score and financial stress score, to recommend the amount of credit a lender ought to extend to your company.
Getting a PAYDEX Score
In order to have a PAYDEX score, you must file for a DUNS number by way of Dun & Bradstreet’s web site. The number is absolutely free. Plus the agency must have records of your payments with four or more vendors.
Your business’s PAYDEX score reveals if your payments are typically made on schedule or ahead of schedule. As you may expect, a greater number is better.
PAYDEX Score Details
The scores work out as follows:
- 80-100: A low risk of late payments
- 50-79: A medium risk of late payments
- 49: A high risk of late payments
Business Credit Score
Your business’s credit rating ranges from 1 to 5. 1 is the best score. This matches your small business with other small businesses with comparable payment histories. The score shows how frequently those small businesses tend to pay timely.
This data can help credit issuers to understand your business’s standing.
But it does not genuinely reflect all of the payment data from your small business.
Financial Stress Score
The financial stress score also ranges from 1 to 5. This score matches your business with other companies sharing similar financial and business characteristics.
These similarities are in areas such as size or amount of time in business. This score demonstrates how frequently those companies tend to pay on time. As before, 1 is the best score. This rating is a broader look at the business landscape, rather than analysis of your small business’s true payment history.
A good PAYDEX score for your small business is 80-100.
Corporate Credit Reports Made Simple at Equifax
Equifax, one of the big credit reporting agencies, supplies a risk monitoring service which is easier as it permits reports to go directly to you. If you do not wish to shell out money for continuing reports, you can as an alternative request your business’s Equifax report.
On top of that, if you want to challenge your small business’s Equifax report, you can do so by abiding by the information on their site.
You can learn to go over your Equifax report by taking a look at an example of their reports.
Your Business’s Equifax Score
Equifax shows three separate business determinations on its business credit reports. These are the Equifax payment index, your small business’s credit risk score, and its business failure score.
Equifax Payment Index
Similar to the PAYDEX score, Equifax’s payment index, which has its gauge on a scale of 100, demonstrates how many of your small business’s payments were made on time. These include both records from credit issuers and vendors.
But it’s not meant to forecast future actions. That is what the other two scores are for.
Equifax Credit Risk Score
Equifax’s credit risk score checks how likely it is your company will become severely delinquent on payments. Scores run from 101 to 992, and they determine:
- Available credit limit on revolving credit accounts, e. g. credit cards
- Your business size
- Proof of any non-financial transactions (e. g. vendor invoices) which are overdue or were on charge off for two or more billing cycles
- Length of time since the opening of the oldest financial account
Equifax Business Failure Score
Lastly, Equifax’s business failure score looks at the likelihood of your company closing. It ranges from 1,000 to 1,600, reviewing these elements:
- 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
- Your company’s worst payment status on all trades in the most recent 24 months.
- Proof of any non-financial transactions (e. g. vendor invoices) which are late or have been on charge off for two or more billing cycles.
Equifax Scoring Analysis
For the credit risk and the business failure scores, a rating of 0 means bankruptcy.
An epic Equifax score for your company is as follows:
- Payment Index 0-10
- Credit Risk score 892-992
- Business Failure score 1400-1600
Corporate Credit Reports Made Simple at Experian
Experian, another big credit reporting bureau, also offers a way to get reports sent to you for a price. As a result you can follow your Experian business credit score here and the setup is effortless.
On the other hand, if you prefer to not get regular reports (and purchase them), then you can order a separate Experian report for your business on their web site.
Also, if there are any problems or issues, you can challenge any errors on your small business’s Experian report if you follow the instructions on their web site. Find out about reading through your Experian report by checking an example Experian business credit report.
Your Small Business’s Experian Business Credit Score
Experian’s Credit Score report includes a company credit score plus other information, such as account histories, payment trends, and public records. Experian company credit scores run from 1 to 100.
Unlike Dun & Bradstreet’s PAYDEX score and Equifax‘s payment index, Experian takes into account various factors, and not merely payment histories.
Experian Scoring Factors
The variables that go into the calculation include:
- Lines of credit your company has an application for in the last nine months
- New lines of credit you’ve begun in the last six months
- Your business’s years in business
- Payment history in the last twelve months
More Experian Scoring Factors
- Lines of credit in use in the last six months
- Collections amounts within the last seven years
- Percentage of available credit in use
- Amount of payments one – 30 days overdue, or 31 days or more overdue
- Number of non-net-30 lines of credit (that means the payment is due in less or greater than 30 days).
Commonly, even small businesses that use credit conscientiously will get a medium-low risk rating. As you might expect, older companies will have a less complex time attaining a low-risk rating.
An awesome Experian score for your company is 76-100.
Corporate Credit Reports Made Simple: Takeaways
Occasionally, it is a good idea to hand over a few dollars so as to ensure that you receive your company credit reports consistently. It’s a lot less troublesome than to have to always remember to do this. And you’ll probably evaluate these reports more closely, as they come with a price tag.
Continue to track and use the tools that these credit reporting agencies offer, and make your life easier. Because it’s obvious; you’ve already got enough on your plate.
As a result of the recent data breach, there are even more reasons to inspect your business and individual credit reports, and be vigilant about any mistakes you spot.