Published By Janet Gershen-Siegel at May 4th, 2021
This is a good time to learn about your Experian business credit report.
But first we should start with some definitions and background on business credit.
This is credit in the name of a business. It is not tied to the creditworthiness of its owner or owners. Rather, business credit scores will depend on how well a company can pay its bills. Hence consumer and business credit scores can vary dramatically.
There are no demands for a personal guarantee. You can quickly get business credit regardless of personal credit quality. And there is no personal credit reporting of business accounts. Business credit use won’t affect your consumer FICO score. Plus the business owner won’t be personally liable for the debt the business incurs.
Being accepted for business credit is not automatic. Building business credit requires some work. Some of the steps are intuitive, and some of them are not.
Fundability is the current ability of our business to get funding. Some factors are within your control. Others (like your time in business) are not. Your online presence and data are one area which is at or close to 100% with your control.
The better your business credit and fundability are, the more likely you will get approval for business financing.
Keep your business looking fundable (legit) with:
There are some aspects of fundability where you should pay particular attention to what is online. Such as:
Records consistency matters here. Your website should show who owns your business. And that info must be consistent. So if the owner is named Susan Johnson on your website’s About page, then she should not be listed as Sue Johnson on your Contact page. If your business ownership changes, you need to show that here.
Abbreviations can be your downfall here, as can punctuation like hyphens, commas, and colons. Maybe your Contact page says your main office is on Main Street. Then your About page should not say it is on Main St.
If your business moves, or you add subsidiaries and other locations, then you need to update that info everywhere. This even means whether you use your 5-digit ZIP code, or a ZIP plus 4 code (9 digits).
If your business is over the road trucking, then it needs to be listed that way. Pro tip: when your industry can be called several different names, mention those other phrases on your site.
When your company domain matches your business name, it helps with fundability. Pro tip: try to match what people are searching for online. So if the word ‘brothers’ is in your company name, then determine if ‘brothers’ or ‘bros’ is used by people searching for your company online.
What distinguishes an Experian business credit report from reports through the two other big credit bureaus? And can you use that data to your advantage?
There are three major credit bureaus for business: Dun & Bradstreet, Experian, and Equifax. FICO SBSS and CreditSafe are also players.
In the business world Equifax and Experian are up there. But it is Dun & Bradstreet which is the major player.
Dun and Bradstreet has more than 10 times the records of the next closest reporting agency. See dnb.com/about-us/company.html. It makes sense to start with Dun and Bradstreet even when going over your Experian business credit report. This is because you must start the business credit building process with them anyway.
Go to the Dun and Bradstreet website and look for your business, at dnb.com/duns-number. But just what happens if you are unable to find it? Then get a free D-U-N-S number. You will always need a D-U-N-S number to start building business credit. Go here to get a D-U-N-S number: dnb.com/duns-number/get-a-duns.html.
A D-U-N-S number is how Dun and Bradstreet gets your company into their system. And a D-U-N-S number plus 3 payment experiences leads to a PAYDEX score. A payment experience is a record of a purchase from a business which reports to a credit reporting agency. In this case, Dun and Bradstreet. Once your business is in Dun and Bradstreet’s system, search Equifax and Experian’s sites for your business. You can do so at creditsuite.com/reports.
Business credit is in a business’s name. And it depends on how well a company can pay its bills. But Experian uses both consumer and business credit data to gauge risk.
They have found that blended data and reports work a lot better for them. For troubled businesses, blended scores dropped an average of 30% over the four quarters leading up to a bad event. The owner’s consumer scores showed no statistically significant decline during the same period.
53% of the time, the first signs of credit problems were on the business credit reports. 46% of the time, the first signs of credit problems were on the owner’s personal report. Blended scores outperformed consumer or business alone by 10 – 20%.
Per Experian:
“By combining personal and commercial credit information in one report, Experian provides a complete picture of the creditworthiness of small businesses”
Get a BIN (Business Identification Number) from Experian. Experian’s BizSource assigns a BIN.
Per Experian Business, bankruptcies stay for 7 to 10 years. Chapter 13 bankruptcy rolls off your credit report 7 years from the filing date. While Chapter 7 bankruptcy stays for 10 years from the filing date. Trade data stays on for 36 months. Judgments, collections, and tax liens stay on for 6 years and 9 months. UCC filings stay on for 5 years. See experian.com/small-business/how-long-credit-report. There are similar time frames for the two other big business credit bureaus.
We’ll look at a Typical Experian Business Credit Advantage SM Report. Experian provides a sample report where you can get an idea of what to expect. Experian changes its reports at times. So the best, most accurate and up to date source for this info is the Experian website. Find it online at https://sbcr.experian.com/pdp.aspx?pg=Sample-BCAI&hdr=report.
The first part of a report has:
Business Credit Scores range from 1 to 100. Higher scores mean lower risk. This score predicts the chance of serious credit delinquencies within the next 12 months. This score uses tradeline and collections info, public filings as well as other variables to predict future risk. This part of the report has a graph to show the score.
Key Score Factors:
Financial Stability Risk Ratings range from 1 to 5. Lower ratings indicate lower risk. A Financial Stability Risk Rating of 1 indicates a 0.55% potential risk of severe financial distress. So this is within the next 12 months.
Experian puts all businesses in one of five risk segments. This rating predicts the chance of payment default and/or bankruptcy, in the next 12 months. This rating uses tradeline and collections data. It also uses public filings and other variables to predict future risk.
Key Rating Factors:
This part has several counts of various data points. For the most part, the details are further within the report.
The data outlined shows:
This part also shows:
This part also has:
Company background has info on founding date, and where the company’s headquarters are. Plus there’s a basic background of what the business does.
This part starts with two graphs. They show the company in question versus its industry on Monthly payment trends and Quarterly payment trends.
These are percentages of on-time payments by month and quarter, respectively.
This part then shows tables with recent payment info by month and quarter. Then there are three more graphs:
This next part shows details on payment experiences (financial trades). There is also data on lender consortium experiences (financial exchange trades):
The Inquiries part shows the industry making the inquiry and a total made during a given month. The Collection Filings sector has the date, name of the agency, and status (open or closed). If a collection is closed, the Collection Filing sector also shows the closing date. The Collections Summary shows: status, number of collections, dollar amount in dispute, and amount collected (even if $0).
For leasing, this part shows:
This part shows:
This part shows cases where the company in the report is plaintiff or defendant.
This part has:
This part has:
This part shows:
Cautionary UCC Filings have one or more of the following collateral:
Experian offers suggestions on how to improve your reports. Such as:
None of the different business bureaus will change your scores without proof. They are starting to accept more and more online disputes. But include proofs of payment with it. These are documents like receipts and cancelled checks.
Fixing credit report errors also means you specifically spell out any charges you challenge. Make your dispute as crystal clear as possible. If you need to snail mail anything in, use certified mail. This is so that you have proof that you sent in your dispute. With all the different credit bureaus, be specific about the concerns with your report.
You can correct Experian issues at: experian.com/small-business/business-credit-information.
The costs of monitoring at all three big business credit reporting agencies can add up fast. At Experian, your best (least expensive) bet would be a Business Credit Advantage. Subscription Plan. It currently costs $189 per year. See sbcr.experian.com/pdp.aspx?pg=Sample&link.
So all of Experian’s reports are expensive! But did you know that you can get business credit monitoring for all 3 of the big business CRAs. And all in one place – for less? Credit Suite offers monitoring through its Business Finance Suite (through Nav). See what credit issuers and lenders see. So you can directly improve your scores and get the business credit and funding you need. See suitelogin.com and creditsuite.com/monitoring.
So Experian has revamped their reports dramatically. And this major business credit reporting agency is committed to correct data, and to helping companies improve their reports. But to monitor Experian, Equifax, and Dun and Bradstreet for a lot less, monitor through Credit Suite!