Business Credit Scoring
The three primary business credit reporting agencies, Dun and Bradstreet, Experian and Equifax, have been examined. Now we’re going to discuss how these corporate credit reporting agencies actually rate your business credit and what that means for you. Each business credit score provider performs their own mathematical evaluation to determine the credit worthiness of a business organization. Each score or rating represents the likelihood of a corporate entity repaying debt and the timeliness of payments. Each business credit score and rating is based on the rated business’ credit performance that is accumulated from creditors who have already loaned or extended financing.
Dun and Bradstreet Paydex Score
What is a Paydex Score? It is a simple scoring system from 0 to 100, similar to a personal FICO score. Typically a 75 Paydex or greater will be where your business can establish credit without the use of a personal guarantee and on favorable terms. This score rates payments to suppliers and vendors for timely servicing of debt terms.
- D&B Credit eValuator Plus Sample Report
Experian Intelliscore Report
Experian is one of the largest credit reporting agencies in the nation. Providing corporate credit scores using their own proprietary method called “Intelliscore” reporting. Her is a sample business Intelliscore report from Experian
Equifax Small Business Credit Risk Score
Equifax is another major corporate credit score provider rendering a numerical value that represents the creditworthiness of a business organization. The better the score, the less risk to a creditor.
What You Need To Build Business Credit Yourself
Make all of your required payments early, or at least, on time. For D&B, you will have to show at least 5 creditors reporting with timely payments to get a Paydex of 75 or better. The other two, you will need to have a bank loan and several bank issued business credit cards with satisfactory payment history for a high rating.