A business credit report is essentially a snapshot of your business’s finances, which banks, suppliers, and business partners use to check how creditworthy your business is. This assessment is key to securing loans, credit cards, and attractive payment terms. The Nav American Dream Gap Survey revealed that 72% of small business owners didn’t know where to get their business credit score. A gap this wide in knowledge can be a major barrier to accessing financing, vendor partnerships, and favorable loan rates, thereby slowing business growth and its ability to withstand crises. Although awareness has improved over the years, many small businesses are still struggling with the concept of business credit and its management.
This article explains how business credit works, how to verify it, and why a strong score is crucial for obtaining credit, gaining vendor trust, and growing your business.
What is a Business Credit Score?
Your business credit score is a quick way to see how reliable your company is financially. Similar to how your personal credit score affects your eligibility for a credit card or mortgage, lenders, suppliers, and other creditors use it to determine the risk of granting credit or financing to your company.
Experian, Equifax, and Dun & Bradstreet (D&B) are the three main business credit agencies that provide business credit scores. Although each has its own unique scoring system, scores normally fall between 0 and 100, where higher scores indicate lower credit risk.
A solid company credit score can help you acquire loans, qualify for better terms, negotiate favorable trade credit, and minimize borrowing expenses. It’s crucial to the long-term success and financial stability of your business.
How Are Business Credit Scores Calculated?
Company credit reporting bureaus employ various elements to calculate your company’s credit score, each helping to assess your business’s credit risk. Here are the important components:
- Payment history: Making on-time payments consistently is one of the most critical aspects in your score
- Credit utilization: Utilizing a lesser portion of your credit limit, best if it is below 30%, shows that you are managing your credit in a proper way.
- Outstanding balances: Maintaining small balances on credit accounts may lead to a reduction in the perception of risk.
- Trade references: Your history of vendor and supplier payments on time is an excellent detail that enhances your credit profile.
- Credit mix: Having a range of credit types (such as loans, credit cards, and vendor accounts) can increase your score
- Years in operation: Having a longer working history is a good way to show that you are stable and can be trusted.
- Company size: Some scoring models can consider bigger companies to be less risky.
What’s in a Business Credit Report?
A thorough account of a company’s creditworthiness and financial history is called a business credit report. These reports provide information on a company’s payment history, demonstrating how regularly it settles its debts with creditors, lenders, and suppliers.
Along with details on credit limits, balances, and conditions of payment, it also provides a list of the company’s credit accounts, including credit cards, loans, and credit lines. The following is a brief summary of the main elements of company credit reports:
- History of payments
- Credit accounts and usage
- Public records
- References to trade
- Details about the company profile
- Financial statements
- UCC filings
- Activity of collection
This data, in addition to the business credit score itself, is commonly used by lenders, suppliers, and other organizations to evaluate the risk of granting credit or establishing a commercial connection. To get better loan terms, trade credit, and supplier agreements, you must keep your report in excellent standing.
How do I Check my Business Credit Score?
Keep track of your business credit score on a regular basis. Checking it will not affect your personal score. As data differs from one bureau to another, you should consider reports from Equifax, Experian, and Dun & Bradstreet.
Complete reports are often paid; however, there are some free tools that provide partial details or notifications.
Dun & Bradstreet credit reports
Compared to the other main commercial credit bureaus, Dun & Bradstreet is a little different. You must register for a D-U-N-S Number, which is available for free on its website, in order to view your D&B report.
Your PAYDEX Score, a crucial measure of how consistently your company pays its bills, as well as up to six other ratings that evaluate credit risk and financial stress, are included in D&B reports. The following are the two lowest plan tiers:
- Credit Insights Free: You can view the overall risk levels for the four main metrics: SER Rating, Failure Score, Delinquency Predictor Score, and PAYDEX, along with brief company information, legal summaries, and updates. But the precise scores and complete payment history will not be disclosed.
- Basic Credit Insights: Access your whole set of company credit scores and ratings, including the PAYDEX, Delinquency, Failure, Supplier Evaluation Risk, D&B, and Maximum Credit Recommendation scores, for $49 a month.
Experian credit reports
Public information about your company, including ownership and registration information, as well as any prior liens, judgments, bankruptcies, or collection activity, is all included in an Experian business credit report.
Two scores are included in Experian company credit reports: the Financial Stability Risk Score, which aids lenders in evaluating overall financial risk, and the Intelliscore Plus Score, which forecasts the probability of significant credit delinquencies.
Although Experian does not provide free credit checks, you can view your score at the lowest level:
- Credit score analysis: This one-time analysis offers a thorough overview of your company’s credit status and costs $49.95. In addition to comprehensive data on payment patterns, UCC filings, judgments, tax liens, bankruptcies, and more, it contains your Intelliscore Plus Score and Financial Stability Risk Score.
Equifax credit reports
Key information about your company’s financial health, including trade credit activity, credit balances, business structure, and public records like bankruptcies, judgments, and liens, is all included in an Equifax business credit report. Additionally, it assesses your payment practices and compares them to those of other businesses in your sector.
The Equifax OneScore for Commercial, which forecasts the probability of major delinquency, and the Business Failure Score, which gauges the potential of a company closing within the next 12 months, are the two scores that make up an Equifax business credit report.
Equifax distributes its business credit reports through various channels, both directly and through authorized third-party providers.
- Business Credit Industry Report Plus 2.0: The single report priced at $49.95 features the Equifax OneScore for Commercial, the Business Failure Score, as well as in-depth financial and non-financial data such as payment trends, debt types, and credit risk indicators.
Other Free Business Credit Monitoring Options
If you’re not prepared to pay for a complete business credit report, there are free ways to find out your business credit score. As previously mentioned, you can use your PAYDEX Score to obtain a free Dun & Bradstreet credit report.
You can also use Nav as another option to get free business credit summaries by creating an account. A single dashboard will show you personal credit details as well as summary figures from D&B, Experian, and Equifax. Although complete reports and scores are not available at no cost, Nav still provides you with valuable information to monitor your credit.
Why It’s Important to Check Your Business Credit Scores
It is very important to check your business credit scores if you want to keep your business financially healthy and have the potential to grow:
- Identify issues before they become costly: Monitoring your report helps catch errors or fraud and address late payments or high credit utilization quickly before they impact financing.
- Qualify for better financing opportunities: A strong score can unlock access to business loans, credit cards, or lines of credit at preferred terms and lower interest rates.
- Strengthen your business relationships: Suppliers and vendors use your score to decide payment terms; higher scores earn trust and better deals.
- Gain a competitive edge: Businesses with robust credit profiles can negotiate more favorable payment terms, win larger contracts, and outpace competition in scaling.
- Safeguard your business reputation: Consistently strong scores show partners and clients that your business is stable and reliable, helping boost your reputation.
Business Credit Report FAQs
The following are some of the frequently asked questions about business credit reports.
What details do you need to check your business credit score?
You’ll need your company’s legal name, registered address, business identification numbers (such as your EIN or CIN), and information about key management. Some bureaus may also request financial statements and registration documentation.
Do all companies have a credit score?
Not all businesses start with a score. It is built over time through financial activities, loan repayments, and supplier relationships. New businesses might not have a score until they establish credit accounts and transactions.
Are business credit scores different from personal credit scores?
Yes, business credit scores analyze a company’s financial behavior, payment history with suppliers, and credit utilization, whereas personal scores focus on individual credit use.
How often should I review my business credit report?
At least once per quarter or before any major financing, partnership, or contract negotiation. Frequent reviews help catch inaccuracies or fraud early.
How can I improve my business credit score?
Pay bills on time, keep credit utilization low, avoid excessive borrowing, and check reports for errors. Establish relationships with reporting vendors and suppliers to build a positive payment history.
Separate Business and Personal Finances for a Clearer Credit Record
If you mix your expenses, it becomes difficult to monitor your cash flow, your financial records weaken, and your business credit score can be negatively affected. Lenders see ambiguous finances as risky, making it harder to get loans or secure better terms.
With Cheqly, you can open dedicated business accounts that come with virtual debit cards, quick transfers, and real-time transaction tracking, helping you keep your finances separate and maintain a clear credit history, which supports a stronger credit profile.
Keep your credit record clean and your business finances organized with a Cheqly business account.