How to Check a Business Credit Score
If you’ve ever taken a financial class, made plans to buy a house, or even tried to open a credit card at Target, you know how important your credit score can be. Having good credit is the golden ticket when it comes to your future — it proves you’re trustworthy and can open a lot of doors to your future.
You may have an excellent personal credit rating, but what about your new business? Like personal credit, your business credit score can snag you better opportunities, lower rates, and help with business start-up costs.
Keeping track of your score is critical and is something you should track and talk about with your financial advisor. Here are some easy ways to check business credit scores and ensure you’re on the right track.
What Is a Business Credit Score?
According to nfcc.com, your business credit score is determined by factors like
- Age of business. How long you’ve been in business matters. Older businesses may receive higher scores for proven longevity. Your payment history factors big here, as you’ll have a longer established record.
- Broken contracts. Like a personal score, your business credit will go down if your business has missed payments on loans or credit cards. However, lenders don’t need your permission to check business scores — that info is public.
- Credit limitations. It turns out your business score is just as frustrating to figure out as your personal score. Having no credit is worse than bad credit. It can also hurt your score to pay off a credit card and cancel that account because it reduces how much credit you have.
Personal vs. Business Credit Scores: How Do They Differ?
Businesses tend to get more moolah floated toward them from lenders than individuals, which can be both a blessing and a curse. The temptation to max out that line of credit will be high. Also, because the business is often its own entity, that score is inherited if sold — something to keep in mind if you’re buying a business from someone or trying to sell yours.
Check out our guide on How Business Credit Score Works to find out all of the differences, as well as ways to keep it high.
What Is a Good Business Credit Score?
This is where things get tricky. Each credit bureau uses different rating systems to determine your score. Your best bet is to monitor multiple bureaus and obtain credit reports detailing what each score means.
Which Bureaus Should I Monitor?
The three credit bureaus checked most often include:
- Dun and Bradstreet
Below is a table with information you can obtain from each bureau and services offered through their website.
|Experian Business Services offers both a monitoring plan and a one-time report. There are fees for both.|
|You can get a free business credit score report through D&B.|
D&B has its CreditSignalⓇ service, which shows you four different scores and alerts you to changes. This is a free service that allows you access for 14 days.
CreditSignalⓇ Plus gives you access to 5 scores and there’s no limit on time when it comes to alerts, and monitoring. It does, however, cost $15 a month.
Their premium package is Credit Monitor™. It costs $39 a month but gives you access to all D&B scores, unlimited monitoring, and alerts, and it helps keep your credit safe by monitoring dark web email activity. This service also compares your ratings against competitors and explains what the scores mean. This handy chart can help you compare plans.
|Equifax for business offers a slew of helpful services for businesses. You can also obtain your business credit report, which gives you a snapshot of important info such as credit risk score, credit utilization, and an index that tracks whether or not you pay on time.|
This service can also be helpful to you if businesses need your services or you’re thinking of collaborating — you can scope out their record and see if they’re trustworthy.
My Business Credit Score Needs Work. How Can I Get Funds?
If your business is new, it can take time to build up your credit. Luckily, many grants for small businesses are available that don’t require a high business credit score.
Your business does have to be established to qualify, but the best part of a grant is you usually don’t have to pay them back — as long as you follow the terms of the grant to the letter.
When applying for grants, read all the fine print to know 100% if you qualify. Various grants are available to people who need a leg up, as well as state and federal grants.
A Good Business Credit Score Can Make or Break Your Business.
Ultimately, having a good business credit score can help you:
- Save money on interest.
- Assure other businesses that you’re trustworthy.
- Secure needed funding.
- Add value to your business if you decide to sell.
Keeping track of your score can also alert you of possible fraudulent activity and teach you how to improve. It’s important to add score tracking to your to-do list or talk to your financial advisor about its status, and how to build it. Luckily, many credit bureaus make it easy
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