How to Check a Business Credit Report

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How to Check a Business Credit Report

Published By Janet Gershen-Siegel at November 28, 2017

How to Check a Business Credit Report Credit Suite-5 Hacks to Set up Your Business Bank Account-Need to Get a SBA Loan>

You Can Check a Business Credit Report Easily – Here’s How

Not everyone knows how to check a business credit report – do YOU?

Your best bet as a small business owner is to remain on top of your small business credit reports from PAYDEX, Equifax, and Experian.

There are three big credit reporting bureaus for companies and you really ought to check all three of them routinely as they use slightly different measurements and so moving the needle for one can move the needle for both of the others. But that’s possibly not as much.

To do that, you’ll need to check a business credit report.

Do not allow your small business credit scores to slide. This is because you need to catch any inaccuracies soon as you can, and also pinpoint anything which is pulling your scores down and then take corrective measures. You can obtain your reports easily and stay right on top of all three scores by following a few easy steps.

What’s a Good Business Credit Score?

Does your business have a good company credit score?

So you are presently in business, and you are working hard to keep on top of your commercial credit scores. Or possibly you aren’t, and have determined now is a good time to start. Or perhaps your business is relatively new, and this is the very first time you’re doing this.

Regardless of your conditions, you’ve probably asked this question at least once. Are my credit ratings any good?

Let’s take a look at the three commercial credit reporting agencies and solve this mystery at long last.

Check a Business Credit Report at D&B (PAYDEX)

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

You may discover the price is well worth it in order to avoid the annoyances that can emerge from letting this score slip, and to not need to create and manage the scheduling and reminders you might need to keep track of if you do not use it.

Alternatives to Credit Signal

Don’t want to make use of Credit Signal? Not a problem, as you can get your PAYDEX report by way of D & B. And, if needed, you can get in touch with their Customer Service department. So this department exists as a section of Dun & Bradstreet itself.

Furthermore, in order to review your PAYDEX report, check out what D & B provides, which is a sample report and even some higher level guidelines in how to read it.

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Your Business’s PAYDEX Score

Dun & Bradstreet’s PAYDEX score runs from 0 to 100. A PAYDEX score has a basis in payment details which is either reported to the CRA or is reported to data-gathering companies partnering with the credit reporting agency.

D & B uses this information, in addition to a credit score and financial stress score, so as to advise just how much credit a lender ought to extend to your small business.

Getting a PAYDEX Score

So as to generate a PAYDEX score, you must file for a DUNS number by means of Dun & Bradstreet’s web site. The number is absolutely free. Plus the CRA has to have records of your payments with four or more vendors.

Your business’s PAYDEX score shows if your payments are normally made without delay or ahead of schedule. As you may 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
  • 0- 49: A high risk of late payments

Business Credit Score

Your small business’s credit score runs from 1 to 5. 1 is the best score. This matches your business with other businesses with comparable payment histories. The score reveals how often those companies tend to pay on time.

This information can really help lenders to understand your business’s standing. However, it does not truly reflect all of the payment data from your small business.

Financial Stress Score

The financial stress score also runs from 1 to 5. This score matches your company with other companies sharing similar financial and business traits. These similarities are in areas such as size or amount of time in business.

Details

This score demonstrates how often those comparable businesses tend to pay on time. As before, 1 is the best score. This rating is a broader evaluation of the business landscape, rather than analysis of your business’s authentic payment history.

A good PAYDEX score for your small business is 80-100.

Check a Business Credit Report at Equifax

Equifax, one of the large credit reporting agencies, offers a risk monitoring service which is easier as it allows for reports to come directly to you. If you don’t wish to pay for continuing reports, you can instead order your company’s Equifax report.

In addition, if you want to challenge your small business’s Equifax report, you can do so by adhering to the guidelines on their website. You can learn to review your Equifax report by browsing through a sample of their reports.

Your Business’s Equifax Score

Equifax shows three separate business determinations on its commercial credit reports. These are the Equifax payment index, your business’s credit risk score, and its business failure score.

Equifax Payment Index

Similar to the PAYDEX score, Equifax’s payment index, which is gauged on a scale of 100, demonstrates how many of your company’s payments were made in time. These include both records from creditors and vendors. However, it’s not designed to forecast future actions, which 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 range from 101 to 992, and they measure:

  • Available credit limit on revolving credit accounts, e. g. credit cards
  • Your company size
  • Evidence of any non-financial transactions (e. g. merchant invoices) which are overdue or were charged 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 looks at the possibility of your business closing. It ranges from 1,000 to 1,600, judging these factors:

  • Total balance to total current credit limit average utilization in the prior three months
  • How long since the opening of the oldest financial account
  • Your business’s worst payment status on all trades in the most recent 24 months.
  • Evidence of any non-financial transactions (e. g. vendor invoices) which are delinquent or have been charged off for two or more billing cycles.

Equifax Scores Analyzed

For the credit risk and the business failure scores, a rating of 0 means bankruptcy.

A great Equifax score for your company is as follows:

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

Check a Business Credit Report at Experian

Experian, one more big credit reporting agency, also offers a means for getting reports sent to you for a fee. For this reason you can keep an eye on your Experian company credit score here and the setup is simple.

Having said that, 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.

In addition, if there are any complications or matters of contention, you can question any problems on your company’s Experian report. Make sure to follow the directions on their site. Learn more about assessing your Experian report by examining a sampling Experian company credit report.

Your Business’s Experian Score

Experian’s Credit Score report includes things like a commercial credit score as well as other information, including account histories, payment trends, and public records. Experian commercial credit scores range from 1 to 100.

Unlike Dun & Bradstreet’s PAYDEX score and Equifax’s payment index, Experian considers various factors, and not just payment histories.

Experian Scoring Factors

The aspects that go into the calculation include:

  • Lines of credit your business has an application for in the prior nine months
  • New lines of credit you’ve begun in the most recent six months
  • Your business’s years in business
  • Payment history in the past twelve months
More factors
  • Lines of credit in use in the most recent six months
  • Collections totals within the last seven years
  • Percentage of available credit in use
  • Amount of payments one – 30 days late, or 31 days or more late
  • Amount of non-net-30 lines of credit (that means the payment is due in fewer or greater than 30 days).

Often, even businesses that use credit responsibly will get a medium-low risk rating. As you might expect, older businesses will have a less complicated time getting a low-risk rating.

A good Experian score for your small business is 76-100.

Takeaways for How to Check a Business Credit Report

In certain cases, it pays to hand over a few dollars in order to be sure you acquire your company credit reports regularly. It’s a lot less troublesome than have to always remember to do this and you’ll probably inspect these reports more thoroughly. Because they come with a price tag.

Keep on track and use the tools these credit reporting agencies supply, and make your life easier. After all, you’ve already got enough on your plate.

As a result of the recent data breach, there are even more reasons to review your company and consumer credit reports, and be vigilant about any errors you find. Discover this new way to check a business credit report.

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