How To Check Your Business Credit Score
- A business credit score measures the creditworthiness of a business. It is a metric used to evaluate a company’s ability to follow through on credit obligations.
- Just like a personal credit score, a business credit score is based on a business’s credit history. However, unlike a personal score, the factors used in evaluating a business’s creditworthiness are different.
- Learning how to check your business credit score is important if you are looking to build business credit.
Learning how to check your business credit score is important if you want to build a credit profile that increases your chances of getting a loan or line of credit for your business.
In this guide you will learn:
What is a Business Credit Score?
A business credit score evaluates the financial health of a business and its ability to follow through on its credit obligations.
It is an important metric used by lenders to evaluate the creditworthiness of a business.
Business credit scores evaluate the creditworthiness of businesses just as personal credit scores evaluate the creditworthiness of individuals.
Unlike personal credit scores that start from 300 (and go up to 800), business credit scores start from zero (and go up to 100).
Just like with a personal score, a business credit score shows how a business has historically used credit. However, business credit scores use a different scoring system than personal credit scores.
How a Business Credit Score Works
Credit bureaus draw information from multiple sources to calculate a business’s creditworthiness. Business credit reporting agencies like Nav use different methods to estimate an enterprise’s credit score.
Each agency weighs the information on your business’s credit report differently based on the model it uses for estimating scores.
Here are some of the most popular scoring models used by credit agencies.
|Credit Score||Range||What is a Good Score?|
|Paydex (D&B)||1 to 100||80 and above|
|Intelliscore (Experian)||1 to 100||76 and above|
|Business Credit Risk Score (Equifax)||101 to 992||892 and above|
Factors that Influence Your Business Score
The metrics for measuring business credit differ from those used to calculate personal credit scores. Here are some of the factors used to calculate a business’s creditworthiness:
- Payment history (to creditors and vendors)
- Age of credit history
- Debt and debt usage
- Industry risk
- Company size and age
How to Check your Business Credit Score for Free
You can check your business credit report online using third-party companies like Nav, Dun & Bradstreet, Experian, and Equifax.
Nav and D&B offer free options that allow you to check your score at no charge.
Nav is a credit monitoring platform that offers a summary of your business credit reports from major business credit bureaus (Dun & Bradstreet, Experian, and Equifax).
In addition to a summary of your business credit reports, Nav offers tools to help you build business credit as well as check your personal credit score from Experian.
Nav currently has a free membership as well as three paid membership tiers. The free tier shows you a summarized version of your credit score.
Rather than an exact number, you will get a grade (A, B, or C) based on your real credit score.
With the free Nav membership, you also get access to their finance marketplace.
Dun & Bradstreet
Dun and Bradstreet uses a scoring model that assigns a DUNS number to a business based on a number of factors.
Values start from zero and go up to 100. Low scores represent low business ratings while high scores reflect high ratings. To be assigned a credit score, you need a DUNS number.
Applying for a DUNS number is free but it can take up to a month to get.
Once you have received a DUNS number, D&B evaluates your business’s financial health and assigns it multiple ratings and predictors.
Dun and Bradstreet offer a range of services to help you keep track of your business credit score. D&B offers both free and paid services.
In the free category is the basic CreditSignal plan. Both the free and paid tiers allow you to check and track your business credit score over time.
Dun & Bradstreet
D&B’s category of premium products offers extra perks like unlimited access to monitor your company’s Dun & Bradstreet business credit file and multiple alert services that notify you when your score and rating change and when your business credit file is requested.
Higher tiers have all the benefits associated with lower tiers plus extra perks.
Since Equifax automatically sets up a credit file for most businesses, you may not need to set up anything to check your credit report.
Your Equifax credit report includes your payment history, details about your business, comparisons to similar businesses, how risky your business is as well as your business credit score.
Experian also automatically sets up a credit profile for most businesses. You will need to check the company’s website to see if your business already has a credit file set up.
If you find that a file hasn’t been set up, you will need to reach out to Experian to request a file.
If you find that you already have a file, you can subscribe to any of Experian’s products to check your business credit score.
Why Business Credit Scores are Important
A business credit score is important for evaluating the creditworthiness of a business. It gives lenders a snapshot of a business’s credit habits and insights into its ability to follow through on credit obligations.
The higher a business’s credit score, the higher the chances of getting approved for a loan. What’s more, your business credit score also determines how much you qualify for and what rates you get.
The higher your score, the better rates you are likely to get.
Why Should You Check and Monitor Your Business Credit Report?
The primary goal of building business credit is to establish a credit profile that increases your chances of getting a loan or line of credit for your business.
So it’s important to keep up with the activities on your credit report (for example, who’s reporting, how many vendors are reporting and to which credit bureaus).
Monitoring your business credit report also helps you see if your credit activities are actually being reported as well as negative changes that are affecting your report.
Another reason why you should monitor your credit report is to catch up on any errors that may be reported to business credit bureaus.
If you find any errors in your credit report, you can dispute those errors and try to correct them so they don’t continue to have a bad impact on your credit profile.
Just like a personal credit score is used to judge the creditworthiness of an individual, a business credit score does the same for a business.
It helps lenders gauge the risk of lending money. A higher credit score is an indication that a business is more likely to follow through on its credit obligations.
Knowing your business credit score is important if you want to build your business credit profile. Services such as D&B CreditSignal and Nav allow you to check your score for free while Experian and Equifax offer paid services.
What is a good business score?
A score of 80 or higher is generally considered a good business credit score. Business scores usually span from zero to 100. The higher your business weighs on that scale, the higher your creditworthiness.
What credit score is needed for a business loan?
You will need a business score of 75 or more to increase your chances of getting a business loan. However, your business credit score is just one of the factors considered by lenders. Other factors include your business’s debt levels, revenue, and time in business.
How can I check my business score for free?
To check your business credit score for free, you will need to use free tools like Nav and D&B CreditSignal plan.