Tag: D&ampB

How a Good D&B Business Credit File Can Help In Hard Economic Times

No one realized when the year started that a crushing recession would follow a global pandemic.  And yet, here we are living in this post COVID-19 world.  Here’s how a good D&B business credit file can help you survive.

Everything you Need to Know about Your D&B Business Credit File and the Other Business Credit Reporting Agencies

When it comes to your business, business credit is one of the most important things you can focus on.  Of course, you should keep your main focus on actually running the business. In hard times however, like during a recession, you will be glad you paid some attention to your business credit.   Dun and Bradstreet is the largest and most widely used business credit reporting agency, or CRA.  If you do not have a D&B business credit file, many lenders consider you  to not have credit. There are other CRAs that are worth mentioning however.

It can help to understand a little more about business credit and how it can help in a recession.  What makes it so special?  Who needs it?  How do you get it?

Why Business Credit?

There are a number of reasons why it is important to actively build business credit.

It Shields Your Personal Credit Report

It is important to organization success that you develop business credit. Without a business credit score, your capability to fund your business rests entirely on your individual credit score. That’s not a big deal if you have great personal credit.

However, business financing can impact your personal credit scores as well.  If you finance your business on the merits of your personal credit, you will likely find your balances stay near your limits.  On personal cards the limits are not as high as most business cards allow.

Discover our business credit and finance guide, jam-packed with new ways to finance your business without emptying your wallet. Save your money during the recession!

This has a negative effect on your credit report.  It is true even if you are making your payments on time. If your business has its very own credit report, it’s not a problem. Limits are higher, so you have a lot more credit to deal with. Regardless, it doesn’t impact your personal credit score.

When you have solid business credit, you have access to the funds you need to run your business.  Not only that, but you can do what you need to do without worrying about exhausting cash reserves.

In short, business credit opens the door to higher limits, lower interest rates, and it protects your business transactions from affecting your personal credit.  This is especially important during a recession.  Imagine how much harder hard times would be if your personal credit was declining due to business issues.

Business Credit vs. Personal Credit

It is also difficult to see how a D&B Business credit file, or any business credit file, is necessary if you do not understand the differences between business credit and personal credit.  We break it down here.

Key Differences Between Personal Credit Reports and Business Credit Reports:

  • Personal FICO scores range from 300 to 850
  • Business credit scores usually range from 0 to 100.
  • FICO algorithms are commonly used by consumer credit bureaus to generate a credit score.
  • Business credit scores do not follow industry standard algorithms, meaning they can vary greatly between credit reporting agencies.
  • Business credit usually include only accounts that are in your company’s name. Your personal accounts are on your personal credit report.
  • You can get a free copy of your personal credit report from the three major consumer credit reporting agencies each year. This includes Experian, Equifax, and TransUnion.  There are also several free options for getting a glimpse at your credit scores at any given time.
  • Business credit is quite different when it comes to accessibility. You have to pay to see your company’s credit report and to find out the score at all three major business credit reporting agencies, including Dun and Bradstreet, Experian, and Equifax.
  • Not just anyone can see your personal credit report, but business credit reports are public. Anyone that wants to pay can see your business credit, including your D&B business credit file.

What Makes the D&B Business Credit File So Special?

Besides being the largest and most commonly uses, they offer way more than just a single business credit score. There are many reporting options that lenders can choose from to assess the credit worthiness of a specific business. Here is a breakdown of what they offer, with an explanation of what it all means.

Credit Reporting at Dun and Bradstreet: What Does Dun and Bradstreet Do?

D&B business credit file Credit Suite2

The quick answer is they provide lenders with business credit reports to help them make lending decisions.

There are six different Dun and Bradstreet reporting options. All of them measure different areas of credit worthiness.   The most popular option is also the easiest to understand.  It is the PAYDEX.   Generally speaking, this is the Dun and Bradstreet credit score most like the consumer FICO score.  It measures the speed of payment.  The score ranges from 1 to 100.  A 70 or higher is “good.” For example, a score of 100 means that the company makes payments in advance, and a score of 1 indicates that they pay 120 days late, or more.

What Else Does a D&B Business Credit File Include?

In addition to the PAYDEX, there are many other options for a business credit report on you D&B business credit file.

●       Dun and Bradstreet Delinquency Predictor Score

The delinquency predictor score measures the likelihood the company will not pay, will be late paying, or will fall into bankruptcy.  The scale is 1 to 5, and a 2 is good.

●       Financial Stress Score

The financial stress score is a measurement of the pressure on a company’s balance sheet.  It indicates the likelihood of a shutdown within a year.  It measures with a minimum of 5 and a maximum of 1, with a score of 2 being a good thing.

  • Supplier Evaluation Risk Rating

This is a rating that ranks the odds of a company surviving 12 months.  The minimum score is 9 and the maximum is 1.  A score of 5 is good.

  • Credit Limit Recommendation

The credit limit recommendation shows a business’s borrowing capacity.  It is a dollar amount recommendation for how much debt a company can handle. Typically creditors use it to determine how much credit to extend.

  • D&B Credit Rating

This is an estimation of overall business risk on a scale of 4 to 1.  A two is good.  The rating includes letters, the combination of which indicate a company’s net worth.

Even if there isn’t enough information on a business to assign a regular rating, Dun and Bradstreet will assign what they call a Credit Appraisal Score.  This is based on number of employees. Another option is an alternative rating based on what data is actually available.

What Goes into a Credit Rating on Your D&B Business Credit File?

The different scores and ratings are based on information from a number of places. The first is the business itself, but they also tap into public records.  A business must submit a financial statement to D&B before they can have a full rating.  In the absence of that, they give a limited rating based on number of employees.  For example, the rating would be 1R if the business has 10 employees or more, and 2R if they have less than 2 employees.

A composite credit appraisal may also be available in the absence of a financial statement in your D&B business credit file.  A business is only eligible for a rating up to a 2 in this case however. You do not get a 1 rating without a financial statement.

You can also self-report trade references to D&B, in addition to financial statement. This makes it easier to build business credit faster.  You will need a D-U-N-S number, of course.  It is free and easy to get on their website.

Discover our business credit and finance guide, jam-packed with new ways to finance your business without emptying your wallet. Save your money during the recession!

Dun and Bradstreet and the Commercial Credit Score

The commercial credit score is the term used to describe the actual business credit score.  It has three separate parts. Each predicts how likely the business is to default on bills or become delinquent.  Following are the three parts and the scales by which they are ranked.

●       Commercial credit score

Measured on a scale of 101 to 670, it predicts the probability of a company becoming delinquent.  A score of 101 is most probable, so that’s bad.  A score of around 500 is good.

●       Commercial credit percentile

This is measured on a scale of 0 to 100.  It measures the probability of delinquency as well, but against other companies in the Dun and Bradstreet system.  A score of 1 is the highest probability compared to other businesses in the system, and most say a score of 80 is good.

●       Commercial credit class

This is a method of dividing businesses into classes based on the probability of delinquency.  Companies in class 1 are the least likely to be delinquent.  If you are in class 2, that’s good.

Who Are the Other CRAs?

You hear so much about Dun and Bradstreet, it is easy to forget that there are other agencies that offer business credit reports.

Equifax

They collect their information in ways similar Dun and Bradstreet, including: information from public records, financial data from the business, and payment history from creditors.  In addition, they factor information about credit utilization, or how much credit a business is currently using versus how much they have available, into their calculation.

They then use the information collected to generate various scores, similar to those on your D&B business credit file, but not the same.  These scores include the business credit risk score and the business failure score. The business credit risk score measures how likely it is that a business will become 90 days or more delinquent on bills over the next 12 months.  It ranges from 101 to 992.  The business failure score ranges from 1,000 to 1610, and it predicts how likely it is that the business will file for bankruptcy over the next year.  The lower the score, the higher the risk.

Another score they offer is the business payment index.  This is their version of the D&B PAYDEX, and it even runs on the same scale, 0 to 100.  It indicates payment history over the past year.  Different from the PAYDEX however, you have to reach a score of 90 or higher for it to be a “good” score.

Equifax also offers business identity reports that serve as confirmation that a company actually exists. It also verifies details such as the company’s tax ID, number of employees, and yearly sales.

Equifax does not allow business owners to request a report on their company.  They decide themselves when to start a credit file on a specific company.

Experian

Your Experian report could be a lot different than the one from your D&B business credit file.  Their credit ranking, Intelliscore, uses more than 800 variables to predict a company’s risk of defaulting or becoming delinquent. A 76 or higher is considered good with Intelliscore.  That indicates a low risk of late payments or default.  A score from 51 to 75 indicates a low to medium risk and 26 to 50 indicates medium risk.  From 25 down 1 is medium high to high risk.

Intelliscore is considered a blended score of both the business and business owner’s information.  It offers insights into a business’s public record findings, collections, payment trends, and overall business background. A major difference between Experian and the other two characters is that they do not ask businesses to self-report at all.  Rather, they collect all the information themselves. Since it includes personal information, you do have to give permission for a lender to view this report.

Specifically, the Experian credit ranking gives insights into a company’s payment trends, public record filings, collections, and general business background. The result is a blended score calculated using both the business and business owner’s information.

Discover our business credit and finance guide, jam-packed with new ways to finance your business without emptying your wallet. Save your money during the recession!

The Experian Database and Credit Report Generation

Experian’s database has information on over 27 million businesses.  Reports are generated with information from the database, which houses information on bankruptcy filings, payment history, collections, banking, insurance, and leases.

There has to be a minimum amount of information in the database about a business before Experian will generate a score for it. There must be at least one tradeline in the system, so you should definitely do business with a company that will report to Experian if you want to build business credit.

Your D&B Business Credit File and Those from Experian and Equifax Can Make All the Difference During a Recession

You can’t know or choose which one your lender will use to base their decision upon.  That means it is important to build strong business credit with each one.  While a lot of this is out of your control, you can choose which starter vendors you work with.  Since not all starter vendors report to all credit reporting agencies, you need to make sure you do business with a variety that report to each one.  Then you can be on your way to building strong business credit.

 

The post How a Good D&B Business Credit File Can Help In Hard Economic Times appeared first on Credit Suite.

Everything You Need to Know About Your PAYDEX and Other D&B Reports

PAYDEX is important to your business credit.  In fact, the D&B PAYDEX is one of the most common tools used by lenders to determine credit risk.  There are a couple of reasons for this. First, Dun & Bradstreet is one of the largest and most commonly used business credit reporting agencies.   Next, the PAYDEX score is the most like the personal FICO score, so it is easy for lenders to understand. 

The PAYDEX is Important, But It’s Not the Only Thing the Dun & Bradstreet Has on You

Though the PAYDEX is the most commonly used, there are other reports that Dun & Bradstreet issue that can be helpful to lenders.  You need to know about all of them, because you never know what all a lender will look at. 

Learn more here and start building business credit with your company’s EIN, not your SSN. 

The Quick and Dirty on the PAYDEX

The PAYDEX Score is Dun & Bradstreet’s score that tells the lender how well your business has paid the bills over the past year. D & B bases this score on trade experiences documented by vendors.  It ranges from 1 to 100.  The higher the score, the lower the perceived risk. In business credit terms, it is the most similar to the personal FICO score. This is why it is the most popular business credit option among lenders. 

In addition to the PAYDEX, D&B issues the following options for lenders. 

PAYDEX and Your Delinquency Predictor

To estimate how likely a company is to be late in paying debts, Dun & Bradstreet uses predictive models. They use predictive scoring, which takes past data to try to predict what will happen in the future. They do this by figuring out the potential risk of a future decision.  Then they compare the historical information to a future event. Thus, predictive scoring only represents a statistical probability. It is not a guarantee.

Financial Stress Percentile

The Financial Stress Percentile compares companies in categories such as region, industry, number of employees, or number of years in the business. Financial Stress Score Norms determine an average score and percentile for like firms. 

Financial Stress Score

Dun & Bradstreet generates Financial Stress Scores to predict how likely it is a business will fail over the next twelve months.  These scores range between from 1,001 to 1,875. A score of 1,001 represents the highest probability while a figure of 1,875 shows the lowest probability of business failure.

Financial Stress Risk Class

This is a rating from D&B that places business in classes from 1 to 5. Class 1 includes businesses least likely to fail, while class 5 includes those firms most likely to fail. Therefore, a D & B customer can rapidly divvy their new and existing accounts by risk and then determine how to proceed. If your business is shown as being Discontinued at This Location; Higher Risk; or Open Bankruptcy, you are going to automatically get a 0 score.

Financial Stress Score Percentile

This score has a 1-100 ranking where a 1 percentile is most likely to fail and a 100 percentile is least likely to fail. If D&B identifies a company as financially stressed, that indicates it has stopped operations following assignment of bankruptcy, voluntarily withdrawn from business operation with unpaid obligations, or closed up shop with a loss to creditors.  It could also mean a company is in receivership, reorganization, or has made some sort of an arrangement for the benefit of creditors.

Supplier Evaluation Risk Rating

The Supplier Evaluation Risk Rating (also called a SER Rating) predicts how likely it is a company will get legal relief from creditors or end operations without paying creditors in full over the next twelve months. Once Dun & Bradstreet calculates the Financial Stress Score percentile for your company, they apply a second set of rules to calculate the SER Rating, on a scale of 1 – 9. A 1 means your company is least likely to fail to pay suppliers. A 9 is the opposite, showing the highest likelihood.

Credit Limit Recommendation

A D&B Credit Limit Recommendation includes two recommended guidelines:

  • A conservative limit, recommending a dollar benchmark if a company’s policy is to extend less credit to minimize risk and
  • An aggressive limit, suggesting a benchmark if a firm’s policy is to extend more credit with potentially more risk.

D & B bases these dollar guideline levels on a historical evaluation of the credit demand for similar businesses, with respect to employee size and industry. They assess how likely a business is to continue to pay obligations according to the agreed-upon terms, and how likely it is to experience financial stress in the next twelve months.

Learn more here and start building business credit with your company’s EIN, not your SSN. 

D & B Rating

A D&B Rating helps lenders assess a business’s size and credit potential. Dun & Bradstreet bases this rating on details in your company’s balance sheet and an overall evaluation of the firm’s creditworthiness. The scale goes from 5A to HH. 

Composite Credit Appraisal

This number, between 1 through 4, makes up the second half of your firm’s rating. It reflects Dun & Bradstreet’s overall rating of your business’s creditworthiness. They analyze company payments, financial information, public records, business age, and other factors.

If your company does not supply current financial information, you cannot get a Composite Credit Appraisal rating of better than a 2. The 1R and 2R ratings show company size only based on the total number of employees.  Consequently, these ratings are assigned if your company’s file does not contain a current financial statement. Employee Range (ER) Ratings apply to specific lines of business that are hard to put into categories under the D & B Rating system. These kinds of businesses receive an Employee Range symbol based upon the number of employees and that is all.

In general, when Dun & Bradstreet does not have all of the information they need, they will show that in their reports. However, omitted information does not necessarily mean your firm is a poor credit risk.

Now, How Do You Get Started Building Your PAYDEX?

The first step is to ensure your business is set up properly to separate it from yourself.  You don’t want business credit accounts reporting to your personal credit. They need to report to your business credit only.  How do you make this happen? Glad you asked. 

Your Business Needs Separate Contact InformationPAYDEX Credit Suite

The first step in setting up a foundation of fundability is to ensure your business has its own phone number, fax number, and address.   Then, when you apply for credit accounts, use that information and not your personal information.   

That doesn’t mean you have to get a separate phone line, or even a separate location.  You can still run your business from your home or on your computer if that is what you want.  You do not even have to have a fax machine.  

In fact, you can get a business phone number and fax number that will work over the internet instead of phone lines.  In addition, the phone number will forward to any phone you want it to so you can still use your personal cell phone or landline.   Whenever someone calls your business number it will ring straight to you. 

Faxes can be sent to an online fax service, if anyone ever happens to actually fax you.  This part may seem outdated, but it does help your business appear legitimate to lenders. 

You can use a virtual office for a business address. How do you get a virtual office?  What is that?  It’s not what you may think.  This is a business that offers a physical address for a fee, and sometimes they even offer mail service and live receptionist services.  In addition, there are some that offer meeting spaces for those times you may need to meet a client or customer in person. 

You Must Have an EIN

The next thing you need to do is get an EIN for your business.  This is an identifying number for your business that works similar to how your SSN works for you personally.  Some business owners use their SSN to apply for business accounts. This is what a lot of sole proprietorships and partnerships do.  However, it really doesn’t look professional to lenders.  It can cause your personal and business credit to get mixed up.  When you are looking to increase fundability, you need to apply for and use an EIN. You can get one for free from the IRS.

Incorporating is Absolutely Necessary

This is the most important step separating your business from yourself.  Incorporating your business as an LLC, S-corp, or corporation is necessary to fundability as well.  It lends credence to your business as one that is legitimate and it  offers some protection from liability. 

Which option you choose does not matter as much for business credit and  fundability as it does for your budget and needs for liability protection.  The best thing to do is talk to your attorney or a tax professional.  What is going to happen is that you are going to lose the time in business that you have.  When you incorporate, you become a new entity. You basically have to start over.  You’ll also lose any positive payment history you may have accumulated. 

This is why you have to incorporate as soon as possible.  Not only is it necessary for fundability and for building business credit, but so is time in business.  The longer you have been in business the more fundable you appear to be.  That starts on the date of incorporation, regardless of when you actually started doing business. 

A Separate Business Bank Account Is Vital

You have to open a separate, dedicated business bank account.  There are a few reasons for this.  First, it will help you keep track of business finances.  It will also help you keep them separate from personal finances for tax purposes. 

Learn more here and start building business credit with your company’s EIN, not your SSN. 

There’s more to it however.  There are several types of funding you cannot get without a business bank account.  Many lenders and credit cards want to see one with a minimum average balance.  In addition, you cannot get a merchant account without a business account at a bank. That means, you cannot take credit card payments.  Studies show consumers tend to spend more when they can pay by credit card. 

How Do You Establish a PAYDEX Score? 

Once you are certain your business is established as an entity separate from you as the owner, you need a DUNS Number. This 9-digit number is a unique identifying number that works to establish a business credit file with D & B. A DUNS (Data Universal Number System) works to keep accurate and timely data on over 250 million businesses around the globe. You want your business to be one of them.

From an identification standpoint, it makes a lot of sense. With the use of this identifier, errors can be kept to a minimum. As a result, Dun & Bradstreet will never confuse your business with someone else’s.

Dun & Bradstreet requires that you register your company for free on their site to get a number. There are a few other ways to get a DUNS if your business belongs to a special class.  These include if it is a US government contractor or grantee, your company is Canadian, or you are working as an Apple developer. 

Registration is fast and simple. Once you have said yes to their Terms and Conditions, you are taken straight to a dashboard where you either ask for a DUNS number or you look up to see if your business is already listed. If it is already on the big list, then you click on your company’s name to make any needed changes. 

Understanding the PAYDEX and How Dun & Bradstreet Works Is Important

By understanding what the D&B PAYDEX is, how it works, and how lenders use it, you can have a better feel for how fundable your business is.  The PAYDEX is one measure of business credit, and business credit is just one piece of a business’s overall fundability. 

While other aspects of fundability are important, business credit is the one that is easiest to control.  All you have to do is make your payments consistently on-time. If you do that, you PAYDEX will be fabulous and you will be able to get whatever funding you need to run and grow your business. 

The post Everything You Need to Know About Your PAYDEX and Other D&B Reports appeared first on Credit Suite.

Monitor Your Credit Score at D&B, Experian, and Equifax

While there are a number of other business credit reporting agencies out there, D&B, Experian, and Equifax are known as the big three.  Not surprisingly, they are the largest and most commonly used. As such, their reports have an influence on lenders when it comes to making lending decisions.  This means that it is vital to your business to monitor your credit score with these companies. How do you do that? What does your score even mean? What else are the reports telling lenders?

Monitor Your Credit Score and Understand What It is Telling Lenders

Your business needs funding to survive.  Of course, your business credit score plays a huge role in the fundability of your business.  If you do not understand your score and the rest of the report however, you can’t do anything about it.  You have to know what reports the CRAs are showing lenders, what is on them, and how they are used. To do this, you have to monitor your credit score. 

Check out our best webinar with its trustworthy list of seven vendors to help you build business credit.

Monitor Your Credit Score: Dun & Bradstreet 

Dun & Bradstreet offers a number of business credit reports.  In fact, there are six in all. Each contains varying information that is meant to alert lenders to your creditworthiness, or lack thereof.  

The PAYDEX is the report lenders use most often.  Likely, this is because it is most similar to the consumer FICO.   It measures payment history on a scale of 1 to 100. A 70 or higher is acceptable.   For context, a score of 100 shows payments are made in advance. A score of 1 indicates that they are 120 day, or more, past due.

The other Dun & Bradstreet Credit Reports include:

Dun and Bradstreet Delinquency Predictor Score

The delinquency predictor score measures how likely it is that the company will not pay, 

will be late paying, or will fall into bankruptcy.  On a scale of 1 to 5, a 2 is good.

Financial Stress Score

As you might imagine, the financial stress score measures pressure on the balance sheet.  As a result, it shows how likely the company is to shut down within 12 months. These scores range from 5 to 1, and a score of 2 is good.  

Supplier Evaluation Risk Rating

This one ranks the odds of a company surviving for a year.  The minimum score is a 9 and the

 maximum is 1.  A good score is 5.

Credit Limit Recommendation

As its name indicates, this is a recommendation that reflects a business’s borrowing capacity.  Even more, it is a guide for how much debt a company can handle. Typically, creditors use this to 

determine how much credit to extend. 

D&B Credit Rating

This is a rating that ranks business risk on a scale of one to four.  A score of 2 is good. The rating is 

given in conjunction with letters, the combination of which indicate a company’s net worth. 

Monitor Your Business Credit: Experian Commercial 

Experian uses what it calls Intelliscore for its ranking.  This involves more than 800 unique factors combined to predict a company’s credit risk. With Intelliscore, a score of 76 or higher indicates a low risk of default. If a score falls between 51 to 75, it shows a low to medium risk.  Scores from 26 to 50 are medium risk. Lastly, from 25 down to 1 is medium high to high risk. 

Experian offers a number of other scores including: 

  • Intelliscore Plus

The Intelliscore Plus is a predictive percentile score that indicates the likelihood that a business will be seriously delinquent, or have a major financial issue, in the next year.  

It uses more even more factors to calculate a score than the original Intelliscore.  Payment history still accounts for 5 to 10%. However, current payment status, trade balances, and percent of accounts delinquent make up 50 to 60% of the score. Credit utilization, company profile, age of the business, industry risk, and public records account for the rest.  Public records include: 

  • liens
  • judgements
  • collections
  • bankruptcies
  • other derogatory items

Data comes from suppliers, lenders, legal filings, collection agencies, credit card companies, and of course public records.

  • The Experian Financial Stability Risk Score (FSR)

This predicts the potential of a business defaulting on its obligations or going bankrupt.  The score identifies high risk businesses using public records. These records include high use of credit lines, severely delinquent payments, tax liens, judgments, collection accounts, risk industries, length of time in business, etc. 

  • Experian’s Blended Score

This is a one pager that provides a quick look at the business and its owner.  A combined business-owner credit scoring model is more comprehensive than a business only or consumer only model.  Blended scores have been found to outperform consumer or business alone by 10 – 20%.

Check out our best webinar with its trustworthy list of seven vendors to help you build business credit.

Monitor Your Credit Score: Equifax Business 

Equifax business combines financial data with industry trade data, and then adds in utility and telephone payment data.  They also use public records information.  

Credit scores from Equifax Business include: 

The Small Business Credit Risk Score for Suppliers

This ranks on a scale 1 to 100, with 90+ indicating that a business has paid its obligations as agreed.  An 80 to 89 means they are 1 to 30 days past due, 60 to 79 indicates they are 31-60 days overdue, and a score of 40 to 59 is 61 to 90 days past the date the payment was due.  In the same way, score simply decrease further from this point. 

Business Failure Risk Score

This score indicates the chance of a company paying its bills late on the following scale: 

  • 497 – 816: 25% or less chance of payment being late
  • 452 – 496: 26 – 50% chance of late payment
  • 415 – 451: 51 – 74% chance of late payments
  • 101 – 414: 75 – 100% chance of late payments

Public Records Report

The purpose of this report is to list bankruptcies, judgments, and liens along with the amount, date of the most recent filing, and how they were satisfied. 

Credit Usage Report

This is a pie chart that gives a visual of your company’s credit usage.  It is a way to see in picture form what percent of your available credit you are using. That is known as your credit utilization ratio, and it has a pretty big impact on your overall credit score.

Credit Report Summary

The summary report shows the number of your business’s credit accounts, as well as the date each one became active. It also lists any amounts past due, along with your most severe status of the past 24 months. 

The highest amount of credit extended, the median balance, and the average open balance are also included.

Additionally, the report lists recent activity such as number of new accounts opened recently, delinquent accounts, number of updated accounts, and inquiries. 

Financial Account Highlights

This report shows details for the past 36 months, including credit accounts and leases. It lists the status, open and close dates, and original and current credit limits. It also shows any past due amount for each.  In addition, the payment amount and frequency for each account, as well as its security status can be seen.

Monitor Your Credit Score: How Can You See Your Reports? 

Now that you know what reports each of the big three offers, you need to know how to see what yours are telling lenders about your business.  That’s the whole reason you monitor your business credit. It can help you get an idea of the fundability of your business. Unfortunately, you cannot get a free copy of your business credit reports like you can with your personal credit reports.  It costs money to monitor your business credit as a general rule.

For example, the big three charge close to $50 or more for each report: 

  • Dun & Bradstreet reports range in price from $61 to $229 per report. 
  • Experian reports are $49.95 per report. 
  • Equifax is $99.95 per report. 

However, you can monitor your credit with D&B and Experian at a fraction of these costs by going to https://www.creditsuite.com/monitoring/. 

Knowing this, there are some one-time options for seeing at least some of the information on some of your credit reports for free.  These typically come in the form of a free trial. 

Monitor Your Credit:  See Your Credit Report for Free

The only real way to get a free copy of your credit report is if you are denied a loan based on your business credit.  Of course, this is not a fun way to see your business credit reports for free. After denial, you will receive a letter in the mail from the agency that provided the lender with your report.  You will have the opportunity to request a free copy of the report that the lender saw, so that you can see why the result was a denial. You have 90 days to submit your request.

In addition to business loan denial, there are a few other options. 

Nav

Nav is a service that will let you see a summary of your credit reports from all three of the major credit reporting agencies.  However, these are only summaries, not full reports. Generally, that means you can see your score, and maybe the accounts you have listed.  While this will help you see where you stand, it will not suffice for the purpose of correcting mistakes or even to show you what you need to do to improve your score. You do have the option to pay for more information though.

Credit.net

While Credit.net does not offer ongoing free business credit reports, you can access a free trial.  There is no credit card required, and after you pull the report, you have 30 days to check it out. This means at least once you can get a totally free look at your report, because there is no fear of missing a cancellation deadline and having to pay anyway. 

Scorely 

This is a lesser known credit reporting agency that will let you see your credit report for free before you pay for an ongoing subscription.  Unlike Nav or Credit.net, they actually calculate their own score similar to the big 3 (Experian, Equifax, and Dun & Bradstreet.) They strive to be totally transparent and to make their reports easy to understand. 

Monitor Your Credit Score: What Can You Do About It?

First, if your business score contains mistakes, you can dispute them.  Then, you can have the mistakes taken off. It needs to be in writing directly to the credit reporting agency.  In addition, you will need to include backup documentation that supports your argument. Do not send originals however. Instead, send copies. 

In contrast, if there are no mistakes but your credit is still lacking, start now making payments on time.  Furthermore, ask telephone and utility accounts to report your on time payments to the CRAs. They are not required to, but some will if you ask.  Additionally, ask your landlord to report your rent payments. Also, work with starter vendors that will offer net 30 invoices without a credit check and that will report your payments.  Go here to find a few to start with. 

Most importantly, pay your bills on time. This is the number one way to increase your business credit score.

Check out our best webinar with its trustworthy list of seven vendors to help you build business credit.

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Monitor Your Credit Score: The More You Know the More You Grow

You can’t know how to fix a problem until you know the problem exists.  This is why it is important to monitor your credit score. Once you know your score and whatever else your reports say about your business, you can figure out what to do about it.  Knowing is half the battle. 

Once you know what information lenders are seeing about your business, you can take action that will help you become more fundable.  Maybe you need to get more diligent about making payments on time. Perhaps you need to dispute mistakes or add accounts. Regardless, you will have no clue what you need to do if you do not monitor your credit.  By keeping an eye on things, you can be sure your business has access to the funding it needs to grow and thrive.  

 

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