The Professional Key to Getting a Credit Report for a Business – Plus Bonus on How to Read Your Scores

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The Professional Key to Getting a Credit Report for a Business – Plus Bonus on How to Read Your Scores

Published By Janet Gershen-Siegel at February 23, 2018

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Do you know the secret keys to getting a credit report for a business? You need to keep on top of your own corporate credit reports and check other companies’ business credit reports, too. But how do you do this?

Your smartest move as a business owner is to stay on top of your business credit reports from PAYDEX, Equifax, and Experian.

There are three big credit reporting agencies for small business. And you really should assess all three of them on a regular basis. This is because they use marginally different touchstones.

Therefore moving the needle for one can move the needle for the two others. But it’s perhaps not as much.

Getting a Credit Report for a Business: Fixing Your Business Credit is Well Worth the Time So You Can Head off Disaster

Do not let your business credit scores slide. This is because you need to pounce on any errors fast as you can. And also detect anything which is dragging your scores downward. Then, after that, you can take corrective steps.

You can get your reports easily and stay right on top of all three scores by following a few basic steps. Plus we offer a bonus – how to interpret your scores.

Getting a Credit Report for a Business: Interpreting Your Scores

Does your small business have an awesome business credit score? Or it is any good at all?

So you are presently in business, and you are striving to keep on top of your company credit scores.

Or maybe you are not, and have decided now is a good time to start. Or maybe your small business is somewhat new, and this is the first time you’re doing this.

No matter what your conditions, you have probably asked this question at least once. Are my credit ratings any good?

Let’s have a look at the three company credit reporting bureaus. And we’ll solve this mystery at long last.

Getting a Credit Report for a Business: Dun & Bradstreet (PAYDEX)

Dun & Bradstreet’s PAYDEX score of your business can end up being among the principal reasons why your business receives credit in any way. D & B provides Credit Signal. It is a method to monitor your credit score by having the reports come immediately to you, for a price.

You may find the expense is well worth it to avoid the annoyances that can stem from letting this score slip. And you would not need to develop and stay on top of the schedules and reminders you might need to keep up with if you do not use it.

Or Don’t Use Credit Signal

Don’t wish to make use of Credit Signal? No problem, as you can get your PAYDEX report by way of D & B. And, if needed, you can speak with their Customer Service department. So this department exists as a part of Dun & Bradstreet itself.

Plus, in order to review your PAYDEX report, check out what D & B provides. So that is a sample report and even some higher level direction in how to decipher it.

Your Company’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 agency. Or it is on report to data-gathering firms partnering with the CRA.

D & B uses this information, as well as a credit score and financial stress score, in order to recommend just how much credit a lender ought to extend to your business.

Getting a PAYDEX Score

So as to get a PAYDEX score, you must file for a DUNS number by means of Dun & Bradstreet’s site. The number is absolutely free. In addition the bureau must have reports of your payments with four or more merchants.

Your business’s PAYDEX score reveals if your payments are normally made on time or ahead of schedule. As you might expect, a higher 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 small business’s credit rating ranges from 1 to 5. 1 is the best score. This matches your company with other companies with similar payment histories. The score shows how frequently those small businesses tend to pay timely.

This information can help lenders to understand your small business’s standing.

But it does not genuinely show all of the payment records from your small business.

Financial Stress Score

The financial stress score also runs from 1 to 5. This score matches your company with other small businesses sharing comparable financial and business attributes.

These similarities are in areas such as size or amount of time in business. This score demonstrates how frequently those small businesses tend to pay on time. As before, 1 is the best score.

This rating is a broader investigation of the business landscape, rather than analysis of your small business’s true payment history.

An awesome PAYDEX score for your small business is 80-100.

Getting a Credit Report for a Business: Equifax

Equifax, one of the major credit reporting bureaus, offers a risk monitoring service. So this is easier as it enables reports to come directly to you.

If you don’t want to purchase continual reports, you can instead order your company’s Equifax report.

Fixing Your Business Credit at Equifax

Also, if you want to question your business’s Equifax report, you can follow the information on their web site.

You can learn how to evaluate your Equifax report by taking a look at a specimen of their reports.

Your Business’s Equifax Score

Equifax displays three distinct 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 its measurement on a scale of 100, demonstrates how many of your business’s payments were made in a timely manner. These include both information from credit issuers and vendors.

But it’s not meant to predict 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 small business will become severely delinquent on payments. Scores range from 101 to 992, and they evaluate:

  • 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 late or were on charge off for two or more billing cycles
  • Amount of time since the opening of the oldest financial account

Equifax Business Failure Score

Lastly, Equifax’s business failure score takes a look at the likelihood of your small business closing. It runs from 1,000 to 1,600, reviewing these elements:

  • Total balance to total current credit limit average utilization in the most recent three months
  • How long since the opening of the oldest financial account
  • Your small business’s worst payment status on all trades in the past 24 months.
  • Confirmation of any non-financial transactions (e. g. vendor invoices) which are overdue 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 awesome Equifax score for your small business is as follows:

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

Keep your numbers in line and good things will happen.

Getting a Credit Report for a Business: Experian

Experian, another big credit reporting company, also provides a way for getting reports sent to you for a cost. For this reason you can keep track of your Experian small business credit score here and the setup is easy.

But if you would rather not get regular reports (and purchase them), then you can order a single Experian report for your firm on their site.

Fixing Business Credit at Experian

Also, if there are any problems or errors, you can fix any errors on your business’s Experian report if you follow the directions on their website.

Find out about reading through your Experian report by evaluating an example Experian business credit report.

Your Company’s Experian Commercial Credit Score

Experian’s Credit Score report includes a company credit score plus other data, such as account histories, payment trends, and public records. Experian business credit scores run from 1 to 100.

Unlike Dun & Bradstreet’s PAYDEX score and Equifax’s payment index, Experian considers a number of factors, and not simply payment histories.

Experian Scoring Factors

The variables which go into the calculation include:

  • Lines of credit your small business has an application for in the last nine months
  • New lines of credit you’ve begun in the past six months
  • Your small business’s years in business
  • Payment history in the last twelve months

More Experian Scoring Factors

  • Lines of credit in use in the prior six months
  • Collections totals in the past seven years
  • Percent of available credit in use
  • Number 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 fewer or more than 30 days).

Commonly, even businesses that use credit conscientiously will get a medium-low risk rating. As you might expect, older businesses will have a much easier time attaining a low-risk rating.

An epic Experian score for your business is 76-100.

Getting a Credit Report for a Business is ultimately a Sensational Money-Saving Move

Often, it is a good idea to hand over a few bucks to ensure you get your company credit reports consistently. It’s a lot less complex than to have to remember to do this. And you’ll probably look at these reports more carefully. This is because they come at a cost.

Stay on target and use the tools that these credit reporting firms provide. And make your life less complicated. It goes without saying; you’ve already got enough on your plate.

Due to the recent data breach, there are even more reasons to go over your small business and individual credit reports. And be vigilant about any mistakes you catch. Discover this new way of getting a credit report for a business.

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