How to Check Your Business Credit Score
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Checking your credit score sounds about as fun as a trip to the dentist, but the two tasks share something else in common: putting it off can only come back to hurt you.
It’s important for business owners to make a regular practice of monitoring their business credit score, as a high score can give you greater access to small business loans and low interest rates.
If you’re not sure where to start, you’re in luck. Today, we’ll be taking a closer look at how to check your business credit score, including detailed instructions on how to access reports from today’s top credit bureaus.
What Is a Good Credit Score and How Can It Help You?
You’re probably already familiar with your personal credit score, which ranges from 350 to 850. Business credit scores work a little differently. They are based on a scale of 0 to 100.
A higher score indicates that your business is “creditworthy”—that is, it says that you’re likely capable of repaying any loans you receive.
A “good” credit score is anything over 80, though Experian breaks down the scores even further, based on the relative risk of your business:
- 0-10: High risk
- 11-25: Medium to high risk
- 26-50: Medium risk
- 51-75: Low to medium risk
- 76-100: Low risk
Your business credit score matters a great deal, especially if you intend to apply for a loan to grow your business at any point in the future.
When you apply for a business loan, your lender will check your credit score to help to determine your eligibility. A high credit score will grant you access to the best loans and can also lower your interest rates.
Low credit scores won’t prevent you from receiving a loan, but it can limit the size of the loan you receive. It can also jack up your interest rates, reducing the cost-effectiveness of the loan. Low credit scores may also increase your insurance rates, since your provider will consider your business to be a higher risk.
If your business just started, you might not generate a meaningful business credit score for a year or two. But that doesn’t mean you should ignore your credit score.
Building positive credit early can be important for the day when you need financing or a loan to expand your business. Your credit score can either open the door to new opportunities or it can present a roadblock to your future.
How to Check Your Business Credit Score
Given the strategic importance of your business credit score, you should make a habit of checking it regularly. Ideally, you should check your business credit score once per quarter, even if your score was high at the time of your last report.
Why so often? It’s important to understand the financial health of your business and address any errors right away. It’s also important to be ready in case you need financing to expand your business or to take advantage of a new opportunity.
Why Is It Important to Check Your Business Credit Score?
There are several key reasons why it’s vital to check your business credit score. Here are some of the most pressing factors:
- Errors can impact your ability to get financing or loans for your business
- Your credit score can fluctuate as different records of debt or payment hit your account
- Unexpected changes in your score can help you to spot fraudulent activity
- Vendors and partners can check your credit score -- it’s important to know what they’ll find when they do!
Additionally, you’ll want to look at your credit report from each of the three major business credit bureaus.
While Dun & Bradstreet offers a free option, a full report will cost money. Be wary of any “free” offers you encounter online. These are sometimes phishing scams, designed to harvest your business information.
You can trust the following business credit bureaus to provide an accurate, reliable business credit score, as well as other relevant pieces of data:
Dun & Bradstreet
Dun & Bradstreet is one of the industry’s most reliable credit bureaus, providing credit scores and a full report to businesses that have credit files through the agency.
Building a credit file with D&B starts with obtaining a D-U-N-S Number, a nine-digit number that identifies your business. You can create this number for free through D&B’s website, though you can expect the registration process to take 30 days.
D&B does offer the ability to receive a D-U-N-S Number in as little as 5 days, provided you set up a CreditBuilder Plus account for $149 per month.
CreditBuilder Plus members can also add positive payment experiences to their file and dispute any errors they find on their report. This can actually be of great value, as it will give you the greatest level of control over your credit history and can streamline the process of settling any disputes that may arise.
Dun & Bradstreet also offers a free CreditSignal account. This free account doesn’t give you unlimited access to your credit report, but it will provide a monthly summary of changes to your business credit file, as well as providing other alerts and services which can be incredibly valuable to monitor any irregularities.
An Equifax business credit report can be obtained through the company’s website. Simply visit the site and search for your business.
Single credit reports can be purchased for a fee of $99.95; however, you can also save by buying a bundle of five reports for $399.99.
The Equifax report has two distinct parts:
- Equifax Business Credit Risk Score: Measures the likelihood of repaying loans
- Equifax Business Failure Score: Measures the likelihood of your business failing
Keep in mind that both of these data points are also available to prospective lenders, so having a handle on the health of your business is important for future planning.
This information may also be useful in helping you understand the overall financial strength of your business. It could even be used for forging business partnerships or securing contracts.
Your Experian Credit Score report is available from the company’s website for $39.95. This report will include your business credit score and other pieces of information, though the scope of a report will be limited.
A more robust report, the ProfilePlus, can be obtained for $49.95. Users can also pay $149 for a yearly subscription service that provides ongoing access to the information.
All reports are generated based on your credit history, public records, demographic information, and the overall risk associated with your industry. For example, bars and restaurants are considered to represent a higher risk than retail stores.
How to Dispute Errors on Your Business Credit Reports
It’s not at all uncommon to find errors in your business credit report, which once again highlights the importance of vigilantly monitoring your credit.
Errors should be dealt with immediately, as an artificially low score could jeopardize your eligibility for future loans or other financing options.
When you notice an irregularity in your credit report, your first step should be to compare it with a report from another agency. If your score differs remarkably from one bureau to another, it increases the probability that the error lies with a particular bureau, not your business.
When this happens, contact the bureau directly. In many cases, the error arises from combining data from two different companies. In other cases, you may need to dispute specific payments or transactions.
If it is an error, the problem can usually be fixed right away, though it may take several weeks or months before the error completely disappears from your credit reports.
Dun & Bradstreet’s CreditBuilder Plus membership option provides a streamlined approach, letting clients dispute their scores directly through the subscription service.
It’s also worth remembering that your business credit score isn’t private. Anyone willing to pay the fee can have access to your credit score and that could impact your relationship with other businesses or suppliers.
Keeping tabs on your score and addressing errors in a timely fashion can ensure that you stay in good standing with any other businesses you’re in a relationship with.
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