Here’s How to Check a Company Credit Rating
Can you check a company credit rating? Don’t worry – you got this. I’m here to show you exactly how to pull and examine your company credit reports.
Your best bet as a company owner is to remain on top of your company credit reports. So these come from PAYDEX, Equifax, and Experian.
There are three big credit reporting agencies for small business. And you should check all of them on a regular basis. This is because they use moderately different touchstones.
Therefore moving the needle for one can move the needle for the two others. But it’s perhaps not as much.
Do not let your small business credit scores slide. This is because you should catch any mistakes soon as you can. And spot anything which is dragging your scores down. Then afterwards take corrective steps.
You can get your reports conveniently and stay right on top of all three scores. Do so by following a few straightforward steps.
How to Check a Company Credit Rating – Is it Any Good?
Does your company have a good business credit score?
So you are currently in business, and you are working hard to keep on top of your small business credit scores. Or possibly you are not, and have decided now is a good time to start. Or maybe your company is relatively new, and this is the very first time you’re doing this.
Regardless 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 solve this mystery once and for all.
How to Check a Company Credit Rating at Dun & Bradstreet (PAYDEX)
Dun & Bradstreet’s PAYDEX score of your company can wind up being one of the major reasons that your business gets credit at all.
D & B offers Credit Signal. So it is a means to keep an eye on your credit score. This is by having the reports come straight to you, for a fee.
You may find the charge is well worth it to avoid the inconveniences that can arise from letting this score slip.
And you would not have to create and stay on top of the schedules and reminders you might need to stay up to date with if you do not make use of it.
Don’t want to make use of Credit Signal? No worry, as you can get your PAYDEX report via D & B. And, if need be, you can call their Customer Service department. So this department exists as a part of Dun & Bradstreet itself.
In addition, in order to review your PAYDEX report, check out what D & B provides. So that is a specimen report and also some higher level suggestions in the best way to decipher it.
Your Business’s PAYDEX Score
Dun & Bradstreet’s PAYDEX score ranges from 0 to 100. A PAYDEX score has a basis in payment details which is on report to the CRA. Or it is on report to data-gathering firms partnering with the CRA. D & B uses this data, in addition to a credit score and financial stress score, to advise the amount of credit a credit issuer ought to extend to your small business.
Getting a PAYDEX Score
In order to have a PAYDEX score, you must file for a DUNS number via Dun & Bradstreet’s web site. The number is free of charge. Plus the agency needs to have records of your payments with four or more merchants.
Your company’s PAYDEX score reveals if your payments are normally made promptly or ahead of schedule. As you might expect, a greater 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 very best score. This matches your company with other businesses with comparable payment histories. The figure shows how frequently those small businesses tend to pay punctually.
This data can really help credit issuers to grasp your business’s standing.
But it does not genuinely reflect all of the payment data from your company.
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 qualities.
These similarities are in areas such as size or amount of time in business. This score shows how often those companies tend to pay on time. As before, 1 is the best score. This rating is a broader evaluation of the business landscape, versus an analysis of your small business’s actual payment history.
A good PAYDEX score for your business is 80-100.
How to Check a Company Credit Rating at Equifax
Equifax, one of the major credit reporting bureaus, supplies a risk monitoring service which is more convenient. This is because it permits reports to come straight to you.
If you don’t want to shell out money for continual reports, you can instead request your company’s Equifax report.
Also, if you have to contest your small business’s Equifax report, do so by following the guidelines on their site.
You can learn how to check your Equifax report by taking a look at a specimen of their reports.
Your Small Business’s Equifax Score
Equifax shows 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
Much like the PAYDEX score, Equifax’s payment index, which has its measurement on a scale of 100, shows how many of your small business’s payments were made punctually. These include both data from credit issuers and vendors.
But it’s not meant to forecast future behavior. 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
- Evidence of any non-financial transactions (e. g. vendor invoices) which are unpaid 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
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, judging these factors:
- Total balance to total current credit limit average utilization in the prior three months
- The length of time since the opening of the oldest financial account
- Your company’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 late 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.
A terrific Equifax score for your business is as follows:
- Payment Index 0-10
- Credit Risk score 892-992
- Business Failure score 1400-1600
How to Check a Company Credit Rating at Experian
Experian, one more big credit reporting agency, also provides a way for receiving reports sent to you for a charge.
Thus you can track your Experian small business credit score. And the setup is effortless. Having said that, if you would rather not get regular reports (and purchase them), then you can order an Experian report for your business on their website.
In addition, if there are any problems or mistakes, you can question any problems on your company’s Experian report. Do so if you follow the instructions on their web site. Learn more about reviewing your Experian report by assessing an example Experian company credit report.
Your Business’s Experian Commercial Credit Score
Experian’s Credit Score report includes things like a business credit score as well as additional details, such as account histories, payment trends, and public records. Experian company credit scores run the gamut from 1 to 100.
In contrast to Dun & Bradstreet’s PAYDEX score and Equifax’s payment index, Experian takes into consideration several factors, and not just payment histories.
Experian Scoring Factors
The aspects that go into the calculation include:
- Lines of credit your company has an application for in the most recent nine months
- New lines of credit you’ve begun in the last six months
- Your small business’s years in business
- Payment history in the prior twelve months
More Experian Scoring Factors
- Lines of credit in use in the prior six months
- Collections totals within the past seven years
- Percent of available credit in use
- Amount of payments one – 30 days late, or 31 days or more overdue
- Amount of non-net-30 lines of credit (that means the payment is due in less or more than 30 days).
Often, even businesses which use credit conscientiously will get a medium-low risk rating. As you might expect, older companies will have a less complex time acquiring a low-risk rating.
A good Experian score for your company is 76-100.
How to Check a Company Credit Rating and Run Your Business
Frequently, it pays to hand over a few bucks. So this is to ensure you get your company credit reports regularly. It’s a lot less troublesome than have to remember to do this. And you’ll probably look at these reports more thoroughly. Because they come at a price. Keep on target and use the resources these credit reporting firms supply, and make your life less complicated. It goes without saying; you’ve already got enough on your plate.
Because of the recent data breach, there are all the more reasons to assess your business credit rating and personal credit reports. And be vigilant about any issues you spot. Learn more here and get started with how to check a company credit score.