Your company has a credit score that continually evolves just as consumers do. Consumer credit reporting agencies, which include FICO, Equifax, Experian, and Dun and Bradstreet, each use slightly variable factors in determining the credit score for your business. Some of these factors include whether your company’s payments post on time or late and the different types of credit the company currently carries.
The good news is that you can take several simple steps to increase your business credit score. That alone could save you hundreds or thousands of dollars in interest charges since lenders reserve their best rates and terms for their best customers.
How Dun and Bradstreet Assigns Credit Scores
Dun and Bradstreet are one of the oldest and most respected names in the business credit industry. It uses four basic categories when determining the creditworthiness of a business. Two of these, the delinquency predictor score and the financial stress score, refer to future predictions for your company’s financial performance. The first score can range from 101 to 670 while the second score can range from 1,001 to 1,875.
The supplier evaluation risk rating only applies if your company acts as a supplier for other businesses. With scores ranging from one to nine, scores on the lower end indicate a stronger likelihood of your business closing within the next 12 months. The Paydex score, with a range up to 100, indicates to other companies how likely it is that your company will fall behind on its bills.
Other Business Credit Reporting Agencies
Equifax, Experian, and FICO use similar methods of determining a credit score but refer to each category under a different name. FICO is the only one of the four that pulls in data from your personal credit report when determining your business credit score. We recommend finding out which reporting agency your lender plans to use and then review the file yourself. This will help you understand scoring criteria and allow you to check for accuracy.
Please contact us at Fast Commercial Money if you would like a more in-depth lesson on business credit scores.