How to Check a Business Credit Score and Be a Business Hero

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How to Check a Business Credit Score and Be a Business Hero

Published By Janet Gershen-Siegel at February 28, 2018

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Be Fearless in Business and Learn How to Check a Business Credit Score

If you want to triumph in business then here’s a question for you: do you know how to check a business credit score? Here are practical and easy to follow ways to stay on top of this vital information. And this is information which can make or break a company.

Your best option as a company owner is to remain on top of your business credit reports from PAYDEX, Equifax, and Experian. There are three big credit reporting agencies for small business. And you absolutely ought to check all three of them regularly.

This is because they use marginally different benchmarks. So moving the needle for one can move the needle for both of the others. But it’s possibly not as much.

Why it Matters

Do not let your company credit scores slide. This is because you have to catch any mistakes soon as you can. And you need to spot anything which is pulling your scores downward. And after that, take remedial action.

You can get your reports easily and stay right on top of all three scores by following a few easy steps.

But What About What the Scores Mean?

Does your business have a terrific business credit score? Or it is any good at all?

So you are currently in business, and you are working hard to keep on top of your small business credit scores.

Or possibly you aren’t, and have decided now is a good time to start. Or maybe your small business is relatively new, and this is the very first time you’re doing this.

Irrespective of your circumstance, you have most likely asked this question at least once. Are my scores any good?

Let’s have a look at the three commercial credit reporting agencies. And we’ll cover this, too.

How to Check a Business Credit Score at Dun & Bradstreet (PAYDEX)

Dun & Bradstreet’s PAYDEX score of your business can end up being one of the main reasons that your company receives credit at all. D & B offers Credit Signal. So it is a method to monitor your credit score by having the reports come immediately to you, for a charge.

You may find the fee is well worth it in order to avoid the inconveniences that can come from letting this score slip. And you would not have to create and handle the organizing and reminders you might need to keep up with if you do not use it.

Or Don’t Use Credit Signal

Don’t want to make use of Credit Signal? Not to worry, 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, which is a specimen report and even some higher level ideas in exactly how to interpret it.

Your Business’s PAYDEX Score

Dun & Bradstreet’s PAYDEX score ranges from 0 to 100. A PAYDEX score has a basis in payment data which is on report to the agency. Or it is on report to data-gathering businesses partnering with the agency.

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

Getting a PAYDEX Score

In order to get a PAYDEX number, you must file for a DUNS number by way of Dun & Bradstreet’s site. The number is free. In addition the agency has to have records of your payments with four or more merchants.

Your business’s PAYDEX score indicates if your payments are normally made in a timely manner or ahead of schedule. As you may expect, a greater number is better.

PAYDEX Score Details

The scores break down 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 runs from 1 to 5. 1 is the very best score. This matches your business with other businesses with similar payment histories. The figure shows how frequently those businesses tend to pay on time.

This information can really help credit issuers to understand your company’s standing.

But it does not truly reflect all of the payment information from your business.

Financial Stress Score

The financial stress score also ranges from 1 to 5. This score matches your company with other businesses sharing similar financial and business properties.

These similarities are in areas like size or amount of time in business. This score shows 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 business’s authentic payment history.

A terrific PAYDEX score for your business is 80-100.

How to Check a Business Credit Score at Equifax

Equifax, one of the large credit reporting bureaus, supplies a risk monitoring service. So this is more convenient as it allows for reports to go directly to you.

If you do not wish to shell out money for regular reports, you can alternatively order your business’s Equifax report. Also, if you need to challenge your business’s Equifax report, you can do so by abiding by the directions on their website.

You can learn how to read through your Equifax report by having a look at a specimen of their reports.

Your Company’s Equifax Score

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

Equifax Payment Index

Similar to the PAYDEX score, Equifax’s payment index, which has its measurement on a scale of 100, demonstrates how many of your small business’s payments were made promptly. These include both information from credit issuers and vendors.

But it’s not meant to predict future activity. That is what the other two scores are for.

Equifax Credit Risk Score

Equifax’s credit risk score assesses how likely it is your company will become severely delinquent on payments. Scores range from 101 to 992, and they determine:

  • Available credit limit on revolving credit accounts, e. g. credit cards
  • Your company 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
  • Length of time since the opening of the earliest financial account

Equifax Business Failure Score

Finally, Equifax’s business failure score takes a look at the risk of your small business closing. It ranges from 1,000 to 1,600, appraising these elements:

  • 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 company’s worst payment status on all trades in the previous 24 months.
  • Confirmation of any non-financial transactions (e. g. vendor invoices) which are delinquent 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 score of 0 means bankruptcy.

An awesome Equifax score for your company is as follows:

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

Keep your scores up and good things will happen.

How to Check a Business Credit Score at Experian

Experian, one more big credit reporting bureau, also provides a method for getting reports sent to you for a fee. As a result you can keep an eye on your Experian small business credit score here. And the setup is effortless.

On the other hand, if you prefer to not get ongoing reports (and purchase them), then you can order just one Experian report on their site.

Also, if there are any complications or errors, you can question any problems on your company’s Experian report. That is, 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 Business’s Experian Business Credit Score

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

Unlike Dun & Bradstreet’s PAYDEX score and Equifax’s payment index, Experian takes into consideration numerous factors, and not only payment histories.

Experian Scoring Factors

The elements which go into the calculation include:

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

More Experian Scoring Factors

  • Lines of credit in use in the previous six months
  • Collections amounts in the last seven years
  • Percentage of available credit in use
  • Amount of payments one – 30 days overdue, or 31 days or more late
  • Number of non-net-30 lines of credit (that means the payment is due in fewer or greater than 30 days).

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

A terrific Experian score for your company is 76-100.

How to Check a Business Credit Score and Become the Audacious, Fearless Business Hero You Were Always Meant to Be

In some cases, it pays to hand over a few bucks in order to make sure you get your company credit reports consistently. It’s a lot less troublesome than have to remember to do this. And you’ll probably inspect these reports more closely. This is because they come at a cost.

Keep on track and use the tools these credit reporting firms supply. And make your life easier. It goes without saying. You’ve already got enough on your plate.

Thanks to the recent data breach, there are even more reasons to inspect your business credit reports and your personal credit reports. And be vigilant about any mistakes you detect. Learn more here and get started running a business credit check.

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