Business Credit Score Versions – Getting an Accurate Picture

Keeping up with your business’s credit scores is the key to securing better financing for equipment. Unlike an individual credit score, which measures a person’s credit history, business credit scores focus on creditworthiness. The three main business credit bureaus, Experian, Equifax, and Dun & Bradstreet, all collect data and project it slightly differently. Like personal reports, you may want to regularly evaluate all three to get the full picture of your business’ credit standing.

Business Credit Score Versions – Getting an Accurate PictureExperian

This company offers a CreditScore report which uses a scale of 1-100, and it takes many factors into account. Experian weighs your company’s years in business, the last 9 months of credit applications, if you’ve opened new credit lines in the last 6 months, collections information, payment history, and percentage of available credit among other factors. You can look at a sample report here.

Equifax

Equifax assesses businesses in a few main ways. The company offers a credit risk score on a scale of 101-992, a business failure score on a scale of 1,000-1,880, and a payment index on a scale of 1-100. Respectively, the scores measure the likelihood of payment delinquency, the likelihood of the business closing, and an on-time payment history. The report will also include public record information and additional company information.

Dun & Bradstreet

The commercial data company offers a PAYDEX score on a scale of 1-100. The PAYDEX score is calculated based on reported payment data from partnering companies, a credit score, and a financial stress score. Based on that information, the company will make a recommendation about lending offerings. To get a PAYDEX number, companies need to sign up for a free DUNS number.

For entrepreneurs, poor credit scores can affect business loans across the board, but larger organizations can also get into hot water if they don’t carefully monitor their credit score. With cybersecurity threats on the rise, credit card identity theft can give lenders an inaccurate picture of your company’s finances. Use security features and keep a close watch on expenditures to address suspicious purchases quickly.

The lenders your business chooses can also make a difference in future credit scoring. Use lenders who regularly report their information to credit bureaus, and then develop a positive financing relationship with them. Every lending experience can improve long-term strategic goals, while securing you the products and services needed to keep your company moving forward.

Reach out to Funding Well Capital to learn more about securing competitive rates and finance programs that align with your company’s strategy.

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