Your business credit score is a number on a 0–100 scale from Experian or Dun & Bradstreet and a 0–300 scale from FICO to determine your company’s financial situation or risk at a high level.
Business credit scores are used by:
- Lenders as part of their approval process to set higher or lower interest rates and determine loan amounts.
- Suppliers to decide whether they should extend favorable payment terms or demand cash on delivery.
- Customers to make sure you’re not going out of business so they are not left with a gap in their supply chain.
- Landlords to make sure you’ll make regular rent payments on time.
Unlike personal scores, any of these business partners can check your business credit without approval. Checking won’t impact your score unless you’re applying for a loan or line of credit though. Business scores are also different from personal ones in these 3 ways:
| Differences | Personal Scores | Business Scores |
| Scoring scale | Use standard 300–850 scale across rating agencies | Use 0–100 or 0–300 depending on rater |
| Scores are comparable across rating agencies | Yes | No. Experian and Dun & Bradstreet use the same numbers, but develop scores differently. |
| Factors that go into score | Fewer | More |
This guide will help you understand what they are, what goes into a business credit score, how to improve one, and what to do in case you find errors on your own report.
Business Credit Scores Overview
Business credit scores come from 3 main raters and each has their own scale, which is different from personal credit scores.
- Experian calls theirs “Intelliscore” and uses a 0–100 scale.
- Dun & Bradstreet’s (DNB) “Paydex” Score also uses a 0–100 scale but it’s unique to DNB. DNB is also the only agency focused solely on business credit.
- FICO’s Small Business Scoring Service (SBSS) uses a 0–300 point scale. The SBA uses FICO SBSS for its loan programs.
Business credit scores use more data points than personal scores. Experian, for example, uses over 140 different data points. The exact weighting of what factors into your score is unique to each rating agency, unlike personal credit scores that have a standard weighting.
Here’s a table with items that go into your score and why they matter.
| Category | Item | Why it matters |
| Business characteristics | How many years you’ve operated | More time in business shows a track record that provides more certainty. More time equals lower risk and a higher score. |
| SIC / NAICS Code | Some industries are riskier than others based on the historical performance or failure rate of businesses in that industry. A riskier industry classification lowers your score. | |
| Size of your business | Smaller businesses are riskier due to fewer revenue sources, fewer assets, and less access to capital. This lowers scores. | |
| Financial statements | Financials show the history of credit management, change in profit margins, and how efficiently you run your business. A longer history of financials and improvement over time in profits, margins, and use of credit leads to higher scores. | |
| Credit Applications | Total applications | Too many applications indicates higher risk because it’s assumed the business has to rely on credit to survive. |
| Trend of application timing | More applications in recent months indicates something is changing that is making the business resort more to credit to fund its bills, which lowers credit scores. | |
| Credit Lines Opened and Used | Number opened | More open credit lines can lower near-term scores. However, more total available credit and using it while paying it off regularly and on time raises scores in the long run. |
| Trend in number opened | An increase in the speed of account openings lowers scores because it shows the business is relying more on credit than before. This could only be a temporary blip as long as you don’t keep opening accounts and you pay bills on time. | |
| Number used | Using more total credit lines also lowers scores near term as it shows the business is relying more on credit and is higher risk. | |
| Percent of credit used | Using a high percentage of total credit available makes a company higher risk because it needs more profits to pay down the debt. This results in lower scores. | |
| Public Records | Collections | A business with collections in public record shows that it has had problems paying its bills, which hurts credit scores. |
| Tax liens, other liens, and judgements | Liens and judgements hurt scores. They show a business did not pay its debt and the creditor had to resort to the legal system. | |
| UCC filings | The total amount of a company’s assets claimed in UCC filings can lower business credit scores since it means there are fewer assets available to lower risk for new creditors. | |
| Payment History | On time, late, or early payments | A long history of early or on-time payments builds credit scores by giving creditors more confidence that the business is well managed and will continue to pay its bills. A history of late payments shows the business has trouble paying and hurts business credit scores. |
When Scores Get Checked
Business credit scores get checked by lenders whenever you apply for a small business loan. Suppliers might check your credit when you’re negotiating terms where a higher score makes them more confident to give you better terms like Net 90 vs Net 30 or even require cash on delivery (COD) if you have a low score.
Customers might pull your credit before signing contracts to make sure you won’t go out of business and leave a gap in their supply chain. Landlords will check because they want to lease for the long-term, especially if they’re investing in a build out. Even competitors might buy your credit report hoping to dig up something they can use.
Fortunately, there’s a difference between hard and soft inquiries for business credit scores. Hard inquiries are specific to a formal application for credit and they do hurt your credit if you have too many or if they’re happening more often. Experian looks at lines applied for in the past 9 months and lines opened in the past 6. Soft inquiries like from a competitor or landlord buying your report won’t impact your score even if there are many of them.
Good vs Bad Business Credit Scores
The number for good vs bad credit scores differs by agency and they break down their scales into different credit risk groups:
Dun & Bradstreet has 3 credit score levels:
- Good credit score: “low risk” range 80–100
- Fair credit score: “moderate risk” range 50–79
- Bad credit score: “high risk” range 0–49
Experian uses 5 separate credit score categories:
- Good credit score: “low risk” range 76–100
- Somewhat good credit score: “low to moderate risk” range 51–75
- Fair credit score: “medium risk” range 26–50
- Somewhat fair credit score: “medium to high risk” range 11–25
- Bad credit score: “high risk” range 0–10
FICO SBSS, which is the score the SBA uses for its loans, has 4 levels of credit scores:
- Excellent credit score: 211–300
- Good credit score: 191–210
- Fair credit score: 161–190
- Bad credit score: 0–160
How to Improve Your Business Credit Score
To improve your business credit score, start by getting your own report from Dun & Bradstreet or Experian (FICO doesn’t offer access to the SBSS directly). Experian charges for access to your scores and full report, while DNB gives some information for free, but it’s limited to “score range” vs actual score, which you have to pay for. Both bureaus offer subscription services to monitor changes to your score.
Look through your report to identify the items that are holding your score down and check the table below for tips on how you can fix them to improve your score.
| Item | How to improve |
| How many years you’ve operated Size of your business Financial statements | You can’t change history, but you can correct errors in your report by contacting the bureaus directly. Here’s where Experian lets you correct or dispute info on your business credit report. For DNB, sign up for their DUNS manager where you can make changes to your business info, dispute items on your report, and upload important info that will help your score like new or updated financial statements. |
| SIC / NAICS Code | Check the secretary of state’s website where your business is registered to make sure they have the NAICS code. If your code is wrong, follow their directions to correct it. Once it’s changed, correct it with Experian and DNB using the links above. |
| Total applications Trend of application timing | If you have lots of recent credit applications, doing more will only drive your score down. Instead, look for alternate sources of funding like finding equity investment, which is different from debt. Or even try alternative funding ideas like crowdsourcing for business. Upload new financial statements to the credit bureaus as your business grows. This will build your scores by showing them how your revenues, margins, and profits have grown. |
| Number of accounts opened Trend in number opened Number used Percent of credit used | Your score will grow in the long term by using your credit lines and paying them on time (or early). Opening and using more credit accounts, especially at an increasing pace, will ding your credit in the near term, but the effect is temporary. If having a bunch of recently opened accounts is weighing on your score and you absolutely have to open another one, do whatever you can to ensure you get approved. The total percent of your used credit should be as low as possible to boost your score. |
| Collections Tax liens, other liens, and judgements UCC filings | While you can’t remove most accurate public records that are hurting your score, you can dispute errors with the credit agencies with the links above. Some creditors might be willing to make changes though. For example, the IRS has a few options related to tax liens that allow changes. Talk to a legal expert if public records are an issue for your business credit score. UCC filings are another type of public record that doesn’t show a negative history like collections do, but they can hurt your business credit score if too many of your assets are covered by them. Avoid blanket UCC filings that give a creditor a legal claim to all of your business assets. |
| On time, late, or early payments | Dispute errors on your payment history with the bureaus. An example could be when a supplier cashed your check but made a clerical error and reported a missed payment to the bureaus. Make future payments on time and early when possible to boost your business credit score. Follow up with creditors to report payments (especially early payments) to the bureaus and to alert the bureaus of late payments you have cleared up. |
FAQs About Business Credit Scores
Is it illegal to deny someone a loan because of a bad score?
No, it’s not illegal to deny someone for a business a loan because of a bad score because that is not a form of discrimination. But, the creditor must give you a notice with your score and contact info for the credit bureau that supplied it if your personal or business credit score is part of the reason you were denied.
Does my personal credit score impact my company’s credit score?
Yes, according to Dun & Bradstreet, your personal credit score impacts your company’s credit score, especially if you’re a sole proprietor or use personal guarantees for the business. How much it matters will decrease over time as you build more business history of on-time payments, financial statements, etc.
For example, when you’re starting a business, lenders will rely almost exclusively on your personal credit. But your personal credit won’t factor in much by the time you have 3 years of profitable operations.
Your personal score can also indirectly affect your business credit when your business doesn’t have much history. Personal credit scores can help you negotiate better terms on business loans, including larger amounts and lower interest payments to grow your business faster, which can then boost your score when you pay them on time.
How is my EIN related to my business credit score?
Your EIN (Employer Identification Number) is related to your business credit score as the unique identifier of your business that credit bureaus, government offices, and others use to track your business. Think of it as the social security number equivalent for businesses.
If I open a new LLC, does my other company’s score get impacted?
No, your other company’s score will not get impacted if you open a new LLC, unless the companies are related like in a business family tree tracked by DNB. Even if your two companies are related, each LLC will have its own EIN, history of payments, financial statements, and more.
The exact amount of the impact the new LLC could have on your other business is likely low, unless you’re trying to do something like open the new LLC to transfer bad assets, which could lead to legal issues that hurt your original business’s score.
Can anyone access my score or do I have to give permission?
Anyone can access your business credit score and report even if you don’t give permission. They’ll have to pay for it through one of the credit bureaus, and it will be a soft inquiry that doesn’t hurt your credit when it’s not directly linked to an application for a credit line.
Most of the time it will be stakeholders in your business, like landlords, customers, and suppliers, but be on the lookout for competitors that might access your credit files.
Do I get to choose which scoring company my lender can access?
No, you do not get to choose which scoring company your lender can access. But you can purchase reports from the scoring companies your lender does not use and provide them with your application. An example would be if you changed your NAICS code and the bureau they use hasn’t updated it yet.
Business credit scores get checked for loans, leases, and by business partners, so monitoring them closely and taking action to improve the items that might be holding back your score are crucial. When your business is ready to submit a small business loan application, we can help you find the best product for your business objective and industry.
