What is a Business Credit Score?
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A business credit score is a numerical measure of your company’s financial reliability. It helps lenders, vendors, and insurers assess the likelihood of your business paying on time.
Unlike personal credit scores, which range from 300 to 850, business scores vary by agency. For example, Dun & Bradstreet uses a 0 to 100 scale, while Equifax can go up to 992. These scores are based on payment history, credit usage, company size, and public records.
Business credit isn’t built automatically. You often need to establish it by applying for a D-U-N-S Number or opening accounts with vendors that report to credit agencies. Once you’ve built a record, your score becomes a key factor in how others decide to work with your company.
Why Your Business Credit Score Matters
Your business credit score significantly impacts your ability to borrow, negotiate, and expand. A strong score can lead to higher credit limits, lower interest rates, and better loan terms. A low score may result in higher costs or rejection altogether.
Vendors also check your score before offering net payment terms. A solid score can help you secure more flexible arrangements and improve your cash flow. Insurance providers may use it when setting your premiums. In short, your score can influence everything from funding to day-to-day operations. Keeping it strong gives your business more financial freedom.
How Business Credit Scores Are Calculated
Business credit scores are calculated using several key factors, though the exact formula varies by reporting agency. Most agencies look at your company’s payment history first—whether you pay bills on time, early, or late.
Other major elements include the amount of credit your business is using compared to what’s available, the age of your credit accounts, and any negative public records, such as bankruptcies, tax liens, or judgments.
Some scoring models also account for your company’s size, industry classification, and how long it has been operating. A well-established business in a stable industry with a clean payment record will generally receive a higher score than a newer company with less predictable cash flow or a history of late payments.
Major Business Credit Reporting Agencies
Three main agencies track and score business credit: Dun & Bradstreet, Experian Business, and Equifax Business. Each agency uses its own scoring system, so your business could have different scores across all three.
Dun & Bradstreet Paydex Score
This score ranges from 0 to 100 and focuses solely on payment history. A score of 80 or higher indicates that you typically pay vendors on time or ahead of schedule. Dun & Bradstreet requires a D-U-N-S Number to create a file, and you must work with vendors that report your payments to the agency.
Experian Intelliscore Plus
Experian’s business score also ranges from 1 to 100, but it takes into account multiple factors beyond payment history, including credit balances, public records, and time in business. A higher score signals lower credit risk. Lenders often use this score when evaluating business loan applications.
Equifax Business Credit Risk Score
Equifax uses a broader scale from 101 to 992. This score is designed to predict the likelihood of serious payment delinquency within the next 12 months. It includes trade payment data, public records, and company background information to assess financial risk.
How to Check Your Business Credit Score
You can check your business credit score by going directly to the major reporting agencies—Dun & Bradstreet, Experian, and Equifax. Each offers its own portal where you can request a credit report and view your score. Some basic information may be available for free, but full reports often require payment.
Dun & Bradstreet offers a free tool called CreditSignal, which sends alerts when changes occur in your file, such as new payment activity or a score update. Regularly checking your business credit allows you to catch errors, detect signs of fraud, and take action to correct any inaccurate or outdated information that could be hurting your score.
Steps to Build or Improve Your Business Credit
Improving your business credit score begins with making timely payments. On-time payments are one of the most important factors across all credit scoring models. You should also aim to keep your balances low compared to your credit limits. High utilization can signal financial stress and negatively impact your credit score.
Ensure your business information is accurate and up-to-date with all credit reporting agencies. This includes your legal business name, address, and contact information. Work with vendors and suppliers that report payment activity to credit bureaus, and maintain a clear separation between your business and personal credit by using a dedicated business bank account and credit card. These habits not only strengthen your score but also create a more stable financial foundation for your business.
What Affects Your Business Credit Score the Most?
Several factors influence your business credit score, but payment history is usually the most important. Consistently paying your bills on time—or even better, paying them early—helps build a positive credit score. On the other hand, late payments, accounts in collections, and bounced checks can quickly lower it.
High credit utilization is another red flag. If you regularly use most of your available credit, it may signal cash flow issues to lenders. Public records such as bankruptcies, judgments, or tax liens, can also damage your score. Even factors like the structure of your business (LLC vs. sole proprietorship) and the risk level associated with your industry can impact how credit agencies evaluate your profile.
How Lenders Use Business Credit Scores
Lenders rely on business credit scores to assess financial risk before issuing loans, credit lines, or other forms of financing. A strong score shows that your business is dependable, increasing your chances of getting approved quickly and at better rates. It can also help you qualify for higher credit limits or longer repayment terms.
While many lenders focus on business credit, some—especially for smaller or newer businesses—will also look at the owner’s personal credit. This is common when there isn’t enough business credit history to assess. Building and maintaining a solid business credit score helps reduce that reliance and positions your company as a trustworthy borrower.
Vendor and Insurance Use of Credit Scores
Your business credit score isn’t just important to lenders—vendors and insurance providers use it too. Before offering net payment terms like Net-30 or Net-60, many vendors will check your score to decide whether your business is a reliable partner. A strong score can make it easier to secure more favorable terms, which in turn helps you manage your cash flow more effectively.
Insurance companies also review your business credit as part of their underwriting process. A higher score may result in lower premiums, as it signals lower risk to the insurer. Whether you’re applying for liability insurance or commercial property coverage, your credit history can play a role in both the approval and pricing.
Keep Your Business Credit in Good Shape
Maintaining strong business credit positions your company to grow, borrow, and establish lasting partnerships. It shows that your business is financially responsible and gives you access to better loan terms, vendor agreements, and insurance rates.
Even small improvements—like paying invoices early or reducing your credit utilization—can have a significant impact over time. For more strategies on improving your financial health and making smarter money decisions, check out the latest insights from Consumer Insite by signing up for our newsletter. Staying informed is one of the best ways to set your business up for long-term success.
