Credit Suite Blog

Get current information on getting credit and loans to grow your business


How a Company’s Credit Score is Calculated

Published By Janet Gershen-Siegel at August 20th, 2017

Get Business Credit Cards for New Businesses Credit Suite-Business Line of Credit Decoded>

You may have been wondering – how is business credit score calculated? Or you want to know what affects business credit score. Well not to worry, as here are all the details for anyone wondering just how business credit score works.

Credit Reporting Bureaus

There are three big credit reporting bureaus and they all determine your score slightly differently. While many of the ideas are the same, the emphasis put on each variable differs. This is why you sometimes see differences in credit scores depending upon who’s doing the reporting. So long as there are no errors on the report, the numbers should be similar but they are not necessarily going to be identical.

Dun & Bradstreet (PAYDEX)

D&B makes a number of proprietary calculations to try to determine whether your small business can pay its bills. One of these is the Financial Stress Scores, which is an effort to predict how likely it is your business will fail in the next twelve months. Business failure is defined as: you get legal relief from your creditors (usually, that’s bankruptcy); you stop all of your business operations without fully paying all of your creditors; or you voluntarily withdraw from your business operations and as a result you leave unpaid obligations; you enter into business reorganization or receivership; or you make an arrangement for the benefit of your creditors. Dun & Bradstreet’s scores range from 1,001 to 1,875. A score of 1,001 represents the highest probability while a figure of 1,875 shows the lowest chance of business failure.

The PAYDEX Score, on the other hand, serves as Dun & Bradstreet’s dollar-weighted rating of how your small business has paid its bills during the past year. D&B bases this score on trade experiences as reported by various vendors. The D&B PAYDEX Score runs from 1 to 100. As you might expect, higher scores mean a better payment performance.


Some of the more important pieces of data Equifax looks into are credit usage, public records, and how your small business handles its financial and nonfinancial accounts. By clearing debts as quickly as possible and not going delinquent, keeping your company’s credit utilization within reason (use less than 30% of your total available credit for best results), and avoiding delinquent payments, you should have a good Equifax score.


Just like Equifax and Dun & Bradstreet, Experian looks at not only how much credit you are using, but also how quickly your small business is paying off its debts. Experian also looks at bankruptcies, and judgments or liens against your company, and any UCC filings. Experian also investigates any tax liens against your small business. They also base some of their scoring on how long your company has been in business and how long your small business has had an Experian listing. The longer, the better.


For all of the large credit reporting bureaus, while the details may be weighed slightly differently, the bottom line is that they are all looking at how responsibly your small business uses credit. Do you pay your bills on time or early, and in full? Then your score will be better. Do you use so much credit that your small business has trouble paying it off on time, and accounts go to collections? Then your score will be worse. Judgments and liens will negatively affect your score; more responsible time in business will positively affect it.

Keep on the straight and narrow, and your company’s credit score is bound to be a good one.

Leave a Reply

Your email address will not be published. Required fields are marked *