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The Effortless Way: How to Run a Business Credit Check

January 26, 2018
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How to Run a Business Credit Check

Have you ever run a business credit check? It’ll help you stay on top of your business credit scores.

Your best bet as a business owner is to check business credit reports from PAYDEX, Equifax, and Experian. There are three big credit reporting bureaus for businesses.

Check Your Scores to Keep Them Highrun a biz credit check Credit Suite

And you really should evaluate all three of them regularly. This is because they use marginally different measurements. And so moving the needle for one can move the needle for the two others. But that’s perhaps not as much.

Do not allow your company credit scores to slide. This is because you have to catch any errors as soon as you can. And spot anything which is pulling scores down.

And then take remedial steps. You can get credit reports conveniently and stay right on top of all three scores. Do so just by following a few basic steps.

What about the Scores?

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

So you are presently in business, and you are striving to keep on top of your company credit scores.

Or possibly you are not, and have decided now is a good time to start. Or perhaps your business is somewhat new, and this is the first time you’re doing this.

Regardless of your conditions, you have most likely asked this question at least once. Are my credit ratings any good?

Let’s have a look at the three commercial credit reporting bureaus.

Discover our Get Business Credit guide, with everything you need to know about building credit for your business.

Run a Business Credit Check at Dun & Bradstreet (PAYDEX)

Dun & Bradstreet’s PAYDEX score of a company can wind up being among the fundamental reasons that a business gets credit in any manner.

D & B has Credit Signal. So it is a means to keep an eye on a credit score by having the reports come straight to you, for a price. You may find the cost is well worth it to avoid the inconveniences that can arise from letting this score slip.

And you would not have to develop and take care of the schedules and reminders you might need to keep up with it. That is, if you do not make use of it.

Checking Without Credit Signal

Don’t want to use Credit Signal? No worry, as you can get a 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.

Additionally, in order to review a PAYDEX report, check out what D & B provides, which is a specimen report. And there are even some higher level tips in how to interpret it.

Your Business’s PAYDEX Score

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

D & B uses this information, in addition to a credit score and financial stress score, in order to recommend the amount of credit a credit issuer ought to extend to your business.

Getting a PAYDEX Score

So as to have a PAYDEX score, you must file for a DUNS number by means of Dun & Bradstreet’s web site. The number is absolutely free. In addition the credit reporting agency will need to have reports of your payments with four or more vendors.

Your small business’s PAYDEX score shows if your payments are commonly made in a timely manner or ahead of schedule. As you might 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 score runs from 1 to 5. 1 is the very best score. This matches your small business with other businesses with comparable payment histories. The figure reveals how frequently those companies tend to pay promptly.

This information can help credit issuers to understand your small business’s standing.

But it does not really show all of the payment information from your company.

Financial Stress Score

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

These similarities are in areas such as size or amount of time in business. This score shows how often those businesses tend to pay on time. As before, 1 is the best score. This rating is a broader look at the business landscape, versus an analysis of your company’s authentic payment history.

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

Discover our Get Business Credit guide, with everything you need to know about building credit for your business.

Run a Business Credit Check at Equifax

Equifax, one of the large credit reporting bureaus, supplies a risk monitoring service. So that is easier as it permits reports to go directly to you. If you don’t wish to pay for continual reports, you can as an alternative request a company’s Equifax report.

On top of that, if you have to challenge a company’s Equifax report, you can do so by following the instructions on their site. You can learn how to read through an Equifax report by taking a look at a sample of their reports.


Your Small Business’s Equifax Score

Equifax displays 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

Much like the PAYDEX score, Equifax’s payment index, which has its measurement on a scale of 100, shows how many of your company’s payments were made on schedule. These include both records 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 business will become severely delinquent on payments. Scores run from 101 to 992, and they assess:

  • Available credit limit on revolving credit accounts, e. g. credit cards
  • Your business size
  • Proof of any non-financial transactions (e. g. merchant invoices) which are delinquent 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 looks at the risk of your company shutting down. It ranges from 1,000 to 1,600, assessing these aspects:

  • Total balance to total current credit limit average utilization in the most recent three months
  • The length of time since the opening of the earliest financial account
  • Your business’s worst payment status on all trades in the previous 24 months.
  • Documentation of any non-financial transactions (e. g. merchant 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 rating of 0 means bankruptcy.

An awesome Equifax score for your business is as follows:

  • Payment Index 0-10
  • Credit Risk score 892-992
  • Business Failure score 1400-1600
Discover our Get Business Credit guide, with everything you need to know about building credit for your business.

Run a Business Credit Check at Experian

Experian, another big credit reporting company, also offers a method for getting reports sent to you for a charge.

Thus you can monitor an Experian small business credit score here and the setup is easy. On the other hand, you might not prefer to not get ongoing reports and pay for them. So then you can order a distinct Experian report for a company on their web site.

Also, if there are any problems or matters of contention, you can challenge any inaccuracies on a company’s Experian report. Do so if you follow the directions on their web site. Learn about assessing an Experian report by examining a sampling Experian small business credit report.

Your Small Business’s Experian Commercial Credit Score

Experian’s Credit Score report includes a small business credit score plus additional facts, including account histories, payment trends, and public records. Experian business credit scores run from 1 to 100.

In contrast to Dun & Bradstreet’s PAYDEX score and Equifax’s payment index, Experian takes into account a number of factors, and not merely payment histories.

Experian Scoring Factors

The aspects 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 most recent six months
  • Your business’s years in business
  • Payment history in the most recent twelve months

More Experian Scoring Factors

  • Lines of credit in use in the most recent six months
  • Collections totals in the past seven years
  • Percent of available credit in use
  • Number 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 more than 30 days).

Usually, even businesses that use credit responsibly will get a medium-low risk rating. As you might expect, older companies will have a much easier time acquiring a low-risk rating.

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

Run a Business Credit Check and Get Ahead

Frequently, it pays to hand over a few dollars in order to make sure you get a company’s credit reports routinely. It’s a lot less troublesome than have to remember to do this. So you’ll probably check out these reports more meticulously. That is because as they come at a price.

Continue to target and use the tools these credit reporting firms provide. And make life less complex. Because it goes without saying; you’ve already got enough on your plate.

A result of the recent data breach, there are all the more reasons to go over small business credit reports and personal credit reports. And be vigilant about any problems you find. Learn more here and get started with how to run a business credit check.

About the author 

Janet Gershen-Siegel

Janet Gershen-Siegel is the Head Finance Writer and Content Manager at Credit Suite. She has been admitted to practice law for over 30 years, with a focus on litigation and product liability, and is a published author, with writing credits at Entrepreneur, FedSmith.com and BusinessingMag.com.

She has a BA in Philosophy from Boston University, a JD from the Delaware Law School of Widener University, and a MS in Interactive Media (Social Media) from Quinnipiac University.

She regularly writes for Credit Suite, which helps businesses improve Fundability™, build credit, and get approved for loans and credit lines.

Her specialties: business credit, business credit cards, business funding, crowdfunding, and law

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