How to Check Your Business Credit Score Easily

March 25, 2021
by
,

According to the most recent Biz2Credit Small Business Lending Index, the percentage of business loans and other credit requests being approved is down. This is true across most types of lenders, including big and small banks, with the exception of institutional lenders.


One of the most important factors ensuring your business can access the funds it needs, whether from loans or lines of credit, is maintaining your business credit score. To that effect, this article breaks down everything you need to know about your business credit profile, including:


  • How to understand my business credit score
  • How to check my business credit score
  • How to build my business credit score


Understanding Your Business Credit Score

A business credit score is very similar to a personal credit score or report. In effect, it determines a business’s creditworthiness. However, it’s distinct from a personal credit report in that its inputs and implication differ, and it often has no bearing on your personal credit. Just like a personal credit score, it’s imperative to be aware of and constantly work to improve it.


The areas that your business credit report impacts most, per the Small Business Association (SBA), include but are not limited to the following:


  • How much credit your business can get, at what interest rates, etc.
  • How potential customers and clients view your business
  • What insurance rates your business qualifies for


The biggest difference between a business and personal credit score is the particular equations and calculations used to determine them. The numbers can look quite different on the surface.


How Your Business Credit Score is Calculated

There are three regularly consulted business credit agencies: the Dun & Bradstreet PAYDEX score, the Experian Intelliscore Plus, and the Equifax Business Credit Score. The former two are scaled from 1 to 100, with scores closest to 100 being best. Scores below 50 indicate a high risk of late payments, whereas scores above 80 represent low chances of late payments.


This differs from regular consumer scores that range from 300 to 850. On that scale, scores above 700 are considered a good credit score, whereas those above 800 are considered “excellent.”


Inputs for your business credit score, per the SBA’s resource, include the following:


  • Basic company information regarding ownership, employees, and subsidiaries
  • Registration, operational, and historical information about the business
  • Financial history, including payments, accounts, and other records
  • Public filings, such as lien searches, judgements, and UCC filings
  • Details specific to your industry, for baselines comparison


The data collected by the credit reporting agency varies depending on the institution calculating or estimating your score, and the exact equations are not publicly available.


Where to Find Your Business Credit Score

Business credit report services aren’t as widely advertised as personal credit checks. Nevertheless, options exist at both free and paid levels for accessing your business credit profile.


Free Business Credit Checks

To keep on top of your business credit score, it’s important to check it annually (at the minimum). To do this for free, here are two options:


  • Nav business credit report – This free service provides a basic summary of your D&B and Experian scores, as well as your own personal credit score (when applicable). These aren’t your full reports, as you need to sign up for one of Nav’s paid business credit services for fuller credit reporting, analysis, and credit-building assistance—starting at $29 per month.


  • Dun & Bradstreet CreditSignal – D&B’s free service offers basic access to your partial D&B score, monthly updates and summaries, and notifications about when your file is being accessed. But this is not your full report; to access that, D&B offers upgrades at several price points, beginning with the D&B CreditBuilder Plus at $149 per month.


Using a free option has the obvious advantage of minimizing costs spent on understanding your business credit standing. However, there are also drawbacks to these frugal options, such as not catching an important error before it harms your business.


Paid Business Credit Checks

In addition to the paid upgrades to free options teased above, two of the best paid solutions for checking your business credit score, include:


  • Equifax business credit report – You can order a single report compiling your D&B, Experian, and Equifax scores for $99.95, and a pack of five is bundled at the price of four (about $400). These detailed reports also include analytics and further scores beyond basic credit, including a risk score (scaled 101-992) and failure score (1000-1610).


  • Experian business credit report – Features vary across Experian’s paid products. At the lowest level, a basic individual report costs about $40. For subscriptions, the most robust option is Business CreditScore Pro, which costs $249 monthly and provides unlimited reports, as well as powerful analytical tools for short- and long-term improvement.


Ultimately, checking your business credit is a means to an end. It’s the first step toward the bigger, more holistic process of improving your business credit and locking down a better score. 


How (and Why) to Build Your Business Credit Score Effectively 

Before breaking down best practices that can improve your score, let’s take a closer look at why you should improve your business credit score. The SBA breaks down a list of reasons business credit is important, and the most striking include:


  • About 45% of small business owners don’t know they have a business credit score, 72% don’t know where to find information on it, and 82% can’t interpret their score.


  • Furthermore, 20% of small business loans that are denied are due to poor credit, and businesses take between 12-18 months on average to improve their credit scores.


  • Finally, over a quarter (27%) of small businesses self-report not being able to secure adequate funding, especially for growth, largely due to their poor business credit score.


Now, let’s take a closer look at what your company can do to get and keep its business credit score as high as possible and avoid falling into such a disadvantageous position.


Best Practices for Business Credit

According to Credit Karma’s guide to business credit scores, there are key steps you can take to build up your score and keep it as high as possible, including but not limited to:


  • Setting up a business bank account and businesscredit card, separate from personal accounts.
  • Working with and prioritizing vendors who report payments to business credit bureaus.
  • Making timely payments—and if possible, early payments—over the minimum required.
  • Checking your scores regularly, correcting harmful behavior, and disputing discrepancies.


One of the best ways to improve your credit is finding an optimal line of business credit you already qualify for, then leveraging it for as many payments as you can manage. 


Some of the best corporate cards available are smart cards that don’t impact your credit score but still give you access to spending and saving features like cash back, promotional deals, and an automated accounting and expense management platform.


Save and Spend Effectively With Ramp

Once you’ve checked your business credit score, the next step is to either maintain or improve it. To do that, you need a tight rein on your company’s finances.


Ramp is a smart corporate card that’s designed to help companies optimize their spending and saving, thus offering them more transparency with their payment history and business credit score. 


With automatic cost-saving opportunities, unlimited flat cash back, and an expense management platform built into the card, Ramp gives you real-time visibility into your spending and cash flow. Track spending and approve expenses with the click of a button. Ramp integrates directly into apps like Slack, optimizing visibility, bookkeeping, and communication across your workforce. 


To increase visibility into your finances and to maintain or build your business credit score with ease, consider Ramp.


Sources


CNBC

Credit Karma

Credit Karma

SBA

SBA
Biz2Credit

Don’t miss these
No items found.
Meet our customers

How we helped Eight Sleep automate their accounting and cut down time spent on weekly burn rate reports.

How we helped WayUp automate month-end close.

How we help Red Antler streamline their spend management.

Learn more about Ramp

Streamline approvals.
Review requests, pre-approve expenses, and issue general expense cards in a few clicks – or directly in Slack. Delegate approvals and empower your team leads to spend on the things they need and control their team’s expenses.
Learn More
Issue instant cards.
Unlimited virtual and physical cards with built-in spend limits, instantly available for everyone in your team. Define spend rules and let your smart cards enforce your policies automatically. No more surprises or under-the-radar spending.
Learn More
See spend as it happens.
Stop waiting on monthly statements or manual spreadsheets. Find, browse, and download real-time transactions from any employee, department, or merchant – on any device.
Learn More
Close your books 5x faster.
An accounting experience by finance teams, built for speed and efficiency. Automate manual processes and start enjoying instant reconciliation – Ramp does all the heavy lifting.
Learn More
Trim wasteful spend.
Ramp analyses every transaction and identifies hundreds of actionable ways your company can cut expenses and alerts your team via email, SMS, or Slack. It’s like having a second finance team, laser-focused on cutting costs.
Learn More
Consolidate reimbursements.
Ramp makes it easy to reimburse your employees for any incidental out-of-pocket expenses. Review, approve, and pay employees back for anything that didn’t make it onto a card with the rest of your Ramp transactions.
Learn More