The Basics of Your Business Credit Score

Few things are more important to growing a business than capital. Whether your company has capital in abundance or is working on building it, you may need access to credit. As such, you must be certain your organization has a healthy business credit score. Still, business credit can be confusing, as it works differently than individual credit.

Company Credit Score Definition

Your company’s credit score is a numerical representation of its creditworthiness. Banks and other lenders use this score when considering whether to issue your organization a line of credit, credit card or other advance money. The higher your company credit score, the more likely it is to receive credit from a lender.

Company Credit Scores vs. Individual Credit Scores

Most individuals have a FICO credit score. Just as a business’s score measures its creditworthiness, a person’s score identifies his or her ability to repay loans. There are some differences between individual credit scores and their business counterparts, however.

While personal scores range from 300 to 800, business scores fall between zero and 100. Also, while individual FICO scores follow a standard algorithm, business scores don’t. Further, while your personal credit score is private, your business credit score is public. If you operate a small business, this may cause concern, as often individual and small business credit becomes intermingled.

Business Credit Bureaus

There are three major business credit bureaus, each of which may assign a credit score to your company Dun & Bradstreet, Equifax and Experian. Remember, there is no standard method for determining business creditworthiness, so your scores may vary widely from bureau to bureau. Each bureau can provide you with information about how it calculates a company’s credit score, however. If you want a business credit report, you must pay for it.

Protecting Your Company’s Credit Score

Occasionally, data breaches at major credit bureaus make headlines. Because you company’s credit score is invaluable to you, you must be careful to protect your business’s score. First, request a credit report at least every year. If you notice any strange information, investigate and file a dispute. Also, be sure you safeguard your company’s credit card and account information.

As a diligent business owner, you know you can’t leave your company’s business score to chance. Remember, a good business credit score is important for growing an organization. As such, you simply can’t afford to ignore your company’s credit report. With the right information, you can be certain your company’s score is accurate.


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