How are Business Credit Scores Calculated

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How are Business Credit Scores Calculated

Published By Janet Gershen-Siegel at October 14, 2017

Corporate Credit Reports Made Simple>

You might have been speculating– how are business credit scorescalculated? Or you need to know what has a bearing on company credit score. Well not to worry, as here are all the specifics for anybody questioning just precisely how does a business credit scorereally work.

Credit Reporting Agencies

There are three significant credit reporting bureaus and they all calculate your score a little differently. While a lot of the techniques are the same, the focus 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 inaccuracies on the report, the scores should be similar but they are not always going to be identical.


A few of the more vital pieces of information Equifax examines are credit usage, public records, and how your business handles its financial and nonfinancial accounts. By getting rid of financial obligations as quickly as possible and not going delinquent, always keeping your small business’s credit utilization reasonable (use less than 30% of your total available credit for optimal results), and avoiding overdue payments, you should have a good Equifax score.

Dun & Bradstreet (PAYDEX)

D & B makes a variety of proprietary computations to try to determine whether your company can pay its bills. One of these is the Financial Stress Scores, which is an attempt to predict how likely it is your small business will fail in the next year. Business failure is specified as: you get legal relief from your creditors (normally, that’s bankruptcy); you quit all of your business operations without totally paying all your creditors; or you voluntarily withdraw from your business operations and consequently you leave past due financial commitments; you enter into business reorganization or receivership; or you make a plan for the benefit of your creditors. Dun & Bradstreet’s scores range from 1,001 to 1,875. A score of 1,001 exemplifies the highest chances while a figure of 1,875 shows the lowest possibility of business failure.

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


Just like Equifax and Dun & Bradstreet, Experian investigates not only how much credit you are using, but also how quickly your small business is satisfying its financial obligations. Experian also reviews bankruptcies, and judgments or liens against your business, and any UCC filings. Experian also examines any tax liens against your business. They also base a portion of their scoring on how long your business has been in business and for how long your company has had an Experian listing. The longer, the better.


For all of the major credit reporting agencies, while the particulars may be weighed slightly differently, the bottom line is that they are all evaluating how reliably your business utilizes credit. Do you pay back your invoices promptly or in advance, and fully? Then your score will be much better. Do you use so much credit that your company has problems paying it off promptly, 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 favorably affect it.

Be responsible with credit, and your company’s credit score is bound to be a good one.

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