How to Build PAYDEX Score Fast: And Other Dun & Bradstreet Reports You Need to Know About

If you know anything about business credit is it probably about the Dun & Bradstreet PAYDEX score. D&B is the largest and most commonly used business credit reporting agency. The PAYDEX score is the score from Dun & Bradstreet that lenders use most often. This is likely because it is the most comparable to the consumer FICO, so they feel like they can easily understand the information it is telling them. Follow these tips to build PAYDEX score fast.<

Build PAYDEX Score Fast, but Don’t Forget the Other D&B Reports

Your Dun & Bradstreet report is among the first things a lender will look at when determining whether to do business with you. They offer database-generated reports to their clients to help them decide if you, a potential vendor, supplier, or business partner, are a good credit risk.

A company will rely on the D & B Report about your firm to make informed business credit determinations and avoid bad debt. Dun & Bradstreet takes several factors into account in creating such a report. Let’s look at all of these factors in turn, starting with the PAYDEX. Afterall, you cannot understand how to build PAYDEX score fast without understanding what exactly the PAYDEX is.

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PAYDEX Score

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.

We will discuss this more in depth later, but the quick answer to how to build PAYDEX score fast is to pay your business obligations on-time and consistently. The trick is getting those payments reported to D&B and not personal credit reporting agencies.

In addition to the PAYDEX, D&B uses the following.

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 historical data to try to predict future results. 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, and 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 similar 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.

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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. Dun & Bradstreet assesses how likely a business is to continue to pay your according to the agreed-upon terms, and how likely it is to experience financial stress in the next twelve months.

D & B Rating

A D&B Rating helps lenders swiftly assess a business’s size and credit potential. Dun & Bradstreet bases this rating on details in your company’s balance sheet, plus 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 rating categories show company size only based on the total number of employees. Consequently, these ratings are assigned only if your company’s file does not contain a current financial statement. Employee Range (ER) Ratings apply to specific lines of business not lending themselves to categorization under the D & B Rating system. These kinds of businesses receive an Employee Range symbol based upon the number of employees and nothing else.

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.

D & B Data

Finally, any report is only as good as the data it originates from. Dun & Bradstreet’s database includes over 250 million companies around the world. It includes around 120 million active companies and about 130 million companies which are out of business but kept for historical reasons. D & B continuously gathers data and works to improve its systems to ensure the greatest degree of accuracy feasible. Businesses should provide D&B with a complete financial statement to ensure as accurate a report as possible.

Build PAYDEX Score Fast: Practical Tips

While it is tremendously helpful to understand all the different reports Dun & Bradstreet can generate for your business, when it comes to getting funding you need to know how to build PAYDEX score fast. Keep in mind however, fast is relative. Will it take years like it does to build a personal credit score? No, it won’t. Will it happen overnight? That’s a resounding no as well.

It also will not happen on its own. You cannot passively do business and expect to build PAYDEX score fast. You have to take intentional steps toward building your business credit score. It’s a process, and it starts with how your business is set up. Some of these steps may already be done, as often they happen in the course of opening a business. Some of them however, may not have seemed necessary at the time. When it comes to building PAYDEXs however, they are absolutely necessary.

Regardless of where you are in the life of your business, it is never too late to take the steps necessary to build PAYDEX score fast.

Build PAYDEX Score Fast: Set Up Your Business as a Fundable Entity

Many times, in the early days of a business, business owners find it easy to run the business as an extension of themselves. They operate as a sole proprietorship, using their own address and phone number as contact information. There seems to be no reason for a separate bank account, and an SSN works just find when asked for.

To build PAYDEX score fast however, this will not work. Your business needs to be separated from yourself as the owner. It needs to appear to lenders to have fundability on its own merits, not yours.

Steps to Set Up Your Business as a Fundable Entity

Separate Contact Information

Contact information is an identifying factor. If you apply for credit with your personal address and phone number, that application is going to pick up you’re your personal credit report. Your business needs its own phone number and address. If you don’t have an actual location or separate phone line, you can still accomplish this. There are a number of options for phone numbers that will ring to your current line, and virtual offices offer a physical mailing address along with many other services.

Get an EIN to Use in Place of an SSN

This is easy to do and completely free. It can be done online at IRS.gov in a matter of minutes. The point is to use this number, instead of your social security number, to apply for credit in your business name. This way, the account will report your information to the business CRAs, including Dun & Bradstreet.

Incorporate Your Business

Whether you choose to incorporate as a corporation, S-corp, or LLC does not matter when it comes to fundability. Make that decision based on other factors, like how much liability protection you need and your budget. You do need to choose one though. Operating as a sole proprietorship will not work well if when building business credit.

Get a D-U-N-S Number

If your follow every single step and do not do this one, you will never build PAYDEX score fast. In fact, you cannot have a PAYDEX score at all if you do not have this number. It’s free also, and easy to get on the D&B website. However, they will try to sell you a ton of other services that you really do not need. Just get the number and move on.

Open a Separate Business Bank Account

Not only will this help you keep your business expenses separated from your personal expenses for tax purposes, but it will also help you when you apply for credit in your business name. Some vendors and lenders like to see a business bank account with a minimum average balance before extending credit.

Build PAYDEX Score Fast: Vendor Credit

Separating your business from yourself is not the whole story. That’s really just laying the foundation that you can build on. You have to stack the blocks, and they have to be stacked in order. You can’t just follow all these steps and then go apply for regular business credit cards with your business credit. It still doesn’t exist.

The key to building PAYDEX score fast is the vendor credit tier. This is how your will initially build your PAYDEX score so that you can apply for credit from those lenders that will want to see a strong score.

The vendor credit tier includes starter vendors that will issue invoices with net 30 terms without even checking your credit. Set up your account in your business name, and they will report your on-time payments to the business credit reporting agencies. It is important to note that not all of them report to all the CRAs, so be sure you find those that report to Dun & Bradstreet if you want to build PAYDEX score fast. The more of these vendors your have reporting, the faster your score will grow. Remember though, you have to pay on time.

Build PAYDEX Score Fast: Other Ways to Get Accounts Reporting

At the same time, you can talk to vendors you already do business with. In light of the fact that you already have a relationship with them, they may be willing to offer net terms without checking credit and report payments. Check with utilities too. They will sometimes report payments to D&B if you ask. The more accounts you get reporting, the faster your score will build. With each on time payment your score will only get stronger.

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It is Possible to Build PAYDEX Score Fast with the Vendor Credit Tier

This process is not only important for building PAYDEX score fast, but really for building PAYDEX, or any business credit at all. If you do not separate your business from yourself, any credit accounts you get approval for will report payments to your personal credit. That doesn’t affect your business credit score. If you follow these steps however, you will be able to build your business credit score on each report, including your PAYDEX report, faster.

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5 Awesome Ways to Build Business Credit Score

Build Business Credit Score to Get the Funding You Need

Business owners hear it all the time. You need business credit to run a business. You shouldn’t run your business using personal credit. Business credit is the best way to ensure you can get the funding you need to build and grow your business. The problem is, you don’t hear a lot about what business credit is, how to get it, or how to build business credit score.

Did you know you can’t automatically build business credit score? That’s right. It isn’t like your personal credit score where accounts are automatically reported. You have to be intentional when you want to build business credit score. In fact, if you have not been intentional, you may not even have business credit yet, despite the fact that you own a business.

How Do You Get Business Credit?

Before you can even begin to build business credit, you have to establish your business as an entity separate from yourself. Here is how that happens:

You have to incorporate

This is the most decisive first step in separating your business credit from your personal credit. When you cease operating as a sole proprietorship and incorporate your business, it will be easier for credit agencies to recognize your business separately. You have a few options.

C Corp

This is the most definitive separation, but it is also the most complicated and expensive. Before choosing this option, be certain there are reasons other than establishing business credit that it needs to be done. If it isn’t necessary for some other reason, there are other, less complicated, and less costly options.

S Corp

This option basically offers the same separation as the C Corp, but taxes are paid at the personal level, rather than requiring the business to be taxed as well, resulting in double taxation. It is also cheaper than incorporating as a C Corp. If you aren’t required to file as a C corp, this is a good alternative.

LLC

Forming a Limited Liability Corporation results in less liability, thus the name, and offers enough separation to serve the purpose of establishing business credit. If you are not required to be a C Corp or S Corp, this is the easiest and most cost-effective way to create the separation of business and personal credit needed.

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Get an EIN

You need to apply for an EIN and stop using your Social Security Number as the identifying number for your business. Your SSN is tied to you, personally, and it is virtually guaranteed that anything connected credit-wise will end up on your personal credit reports.

The process for applying for and EIN is easy. The IRS has an online form, and as soon as all the information is verified you receive your number. It typically happens almost immediately.

Get a DUNS Number

Dun and Bradstreet (D&B) is the most widely used business credit reporting agency. They issue each business on file a 9-digit DUNS number. Application is easy and free, and once you have that number, you will be even closer to establishing credit for your business separate from your own.

Separate Contact Information

Your business needs its own phone number. This way, when you apply for credit, you can enter contact information that is separate from your own. When information is reported to agencies, sometimes the phone number is an identifying factor. If you and your business share a number, that just decreases the level of separation.

Be sure you get your business phone number listed in the directory under the business name.

Business Bank Account

There has to be a dedicated business bank account. Run all business transactions through this account. Resist the temptation to pay personal expenses from it by paying yourself a salary instead.

What if You Already have Business Credit?

The next question is, how do you build business credit score if you have business credit already, but it is bad? How do you improve your business credit score? It is impossible to improve on anything if you do not know what you are starting with, what you have to work with, and what you have control over. Let’s break down where exactly your business credit score comes from and what it means. This is important to get a good starting point.

Dun & Bradstreet

Dun & Bradstreet offers several different types of business credit reports. In fact, there are six different reporting options in all. They all offer different information related to credit worthiness. It takes all of them to get the whole picture.

The report most used is the PAYDEX. This is probably because it is the easiest to understand. It is the options most like the consumer FICO score. It measures how quickly a customer makes payments and ranges from 1 to 100. Scores of 70 or higher are acceptable. For reference, a score of 100 shows payments are made in advance, and a score of 1 indicates that they are 120 days late, or more.

Experian Commercial

Experian uses what it calls Intelliscore as its credit ranking. There are more than 800 different factors that they use to predict a company’s credit risk. With Intelliscore, a score of 76 or higher indicates a low risk of default or late payment. If a score falls between 51 to 75, it indicates a low to medium risk. Scores from 26 to 50 are medium risk, and from 25 down to 1 is medium high to high risk.

Experian Commercial offers a number of other scores as well, similar to Dun & Bradstreet.

Equifax Business

Equifax gets its business credit data in ways similar to D&B and Experian. They get Net 30 type industry trade credit information from a wide variety of suppliers that provide products and services to businesses on an invoice basis.

In addition, they use financial data with this industry trade data, and they add in utility and telephone payment data. They also use public records information.

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Equifax Business credit scores include:

The Small Business Credit Risk Score for Suppliers

It is scored on a scale of 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, 40 to 59 is 61 to 90 days past the payment date. It just goes down from there.

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 overdue
452 – 496: 26 – 50% chance of payment going overdue
415 – 451: 51 – 74% chance of delinquent payments

FICO SBSS

The FICO SBSS is the business version of your personal FICO credit score. It is becoming increasingly more common for lenders to use this score, rather than the Experian or even the D&B PAYDEX business credit score.

Unlike your personal FICO, the SBSS reports on a scale of 0 to 300. Of course, the higher the better, but most lenders require a score of at least 160.

This is a lot different from other business credit scoring models because it combines your business credit score, personal credit score, and other financial information such as business assets and revenue. It is a total global financial picture rolled into one score.

How Do You Know What Your Score Is?

Unfortunately, there are not a lot of ways to find out what your business credit score is without paying. Find out how to get business credit reports for free here. Most options do not work on a continual basis however. You will eventually have to pay.

The prices are not cheap. Here are the prices for the top 3 business credit reporting agencies:

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.

As for your FICO SBSS, that is a whole other story. You cannot really get a copy of it because it will be different from lender to lender. They system calculates a score based on what the lender tells it to look for. This means the lender can weight certain aspects of the calculation. For example, if one lender says that they want the personal credit history to be heavily weighted and another prefers to focus on another type of debt, those two lenders will have two different scores. Meanwhile, another lender may leave out student loans all together. The next may not want any personal credit information at all. With the huge number of possibilities, you could feasibly have a different FICO SBSS score every time.

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5 Way to Build Business Credit Score

Once you understand where it comes from, what it is, and what it means, you can get to work and build business credit score. Here are some of our favorite tips.

1. Get more accounts reporting

The fastest way to build business credit score is to get as many accounts as possible reporting on-time payments. The fastest way to do this is to work with starter vendors.

These are vendors that will offer net terms on invoices without a credit check. After you pay, they will report those payments to the credit agencies. As more and more of these vendors report your payments, your business credit score will start to grow.

Another way to get more accounts reporting on-time payments is to ask vendors you already work with to report. You pay things like rent, utilities, and your telephone bill each month. Sometimes if you ask them, they will report those payments. They are not required to though.

2. Dispute Mistakes on Your Credit Report

This is one thing that a lot of business owners do not realize they can do to build business credit score. Once you are able to see your business credit report, be sure to dispute any mistakes you find. Do this in writing. When you send the letter, you have to be very detailed about what the mistake is. Be clear about the correct information, and send copies of supporting documents. These are documents like receipts and cancelled checks. Additionally, use certified mail to send dispute information. .

Dispute your or your business’s Equifax report by following the instructions here: www.equifax.com/small-business-faqs/#Dispute-FAQs.

You can dispute mistakes on your or your business’s Experian report by following the instructions here: www.experian.com/small-business/business-credit-information.jsp.

And D&B’s PAYDEX Customer Service contact number is here: www.dandb.com/glossary/paydex.

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3. Do Business with SBFE Members

The Small Business Finance Exchange collects information from its members for their database. They then provide this information to partner credit agencies. These credit agencies can then distribute that information to other SBFE members seeking credit data on potential borrowers. Consequently, by doing business with members of the Small Business Exchange, you ensure that the credit agencies have as much information as possible related to your business.

4. Work on Credit Utilization

It’s important to remember that using too much of your available credit can cause problems. Your credit utilization, as indicated by your debt-to-credit ratio, needs to stay as low as possible. So you cannot use up every bit of credit you have. Carrying balances close to your limits will raise this ratio. As a result, your credit score will go down. Granted, you need to carry balances and make payments to get those payments reported. However, avoid getting too close to your limits.

5. Don’t Forget About Your Personal Credit Score

Despite the fact that business credit is separate from your personal credit, there are some business credit reporting agencies, like Experian Business and FICO SBSS, that use your personal credit history in the calculation. As a result, it is possible for a poor personal credit score to have a negative effect on your business credit score. So don’t neglect it.

Follow These Tips and You Can Build Business Credit Score

Here’s the thing. It will not do you any good to get more accounts reporting, correct mistakes, or work with SBFE members if you are not making payments on time. Regardless of how much credit you have available and how little you are using, not paying will tank your score fast. Hence, it will totally negate any progress you make to build business credit score. You just have to pay, on-time, and consistently.

Whether you are starting from scratch or trying to build up a bad score, trying to build business credit score can be completely overwhelming. Honestly, you have to start somewhere though, right? These tips can help you find a good starting point, and from there you just keep swimming.

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New Business Credit Score Do’s and Don’ts

Breathe Life into Your Business with Your New Business Credit Score

Are you trying to get a new business credit score? Looking to ditch an old one and get a bright, shiny new one? Maybe you don’t have one at all yet and you need to know how to get one. Never fear. We have all the dos and don’ts to help you build a business credit score either from scratch, or by improving old, dented one.

Why Do I Need a Business Credit Score at All?

This is actually a pretty common question. A surprising number of people do not realize that their business can have credit that is not related to their personal credit. The fact is, not only can your business have its own credit, but it should. The reasons for this are many. Most importantly, keeping your business credit and personal credit separate protects both your personal and your business finances from being affected by each other.

In addition, business credit cards often have higher limits, meaning they can handle the higher spending needs most businesses have. If you tried to finance all of your business expenses on personal credit cards, you would likely keep balances at or near your personal credit limits. This would increase your debt-to-credit ratio, which in turn has a negative affect on your personal credit score.

So, what are the major dos and don’ts for a new business credit score?

Discover our business credit and finance guide, jam-packed with new ways to finance your business without emptying your wallet.

Don’t Operate Under Personal Information

If you are running your business as a sole proprietorship, or a partnership, you are going to have a problem getting a business credit score. If your business has the same phone number, address, and email address as you, that’s even more of an issue.

Your business has to be separate from you, and here is why. If you do not ensure your business is recognized as a separate entity from yourself, all of your business transactions are just going to go straight to your personal credit report. Here is how to keep that from happening.

Get Incorporated

The first step is to incorporate. This is the first step to separating your business credit from your personal credit. You have a few options.

C Corp– This is the most definitive separation, but it is also the most complicated and expensive. Before choosing this option, be certain there are reasons other than establishing business credit that it needs to be done. If it isn’t necessary for some other reason, there are other, less complicated, and less costly options.
S Corp– This option basically offers the same separation as the C Corp, but taxes are paid at the personal level, rather than requiring the business to be taxed as well, resulting in double taxation. It is also cheaper than incorporating as a C Corp. If you aren’t required to file as a C corp, this is a good alternative.
LLC– forming a Limited Liability Corporation results in less liability, thus the name, and offers enough separation to serve the purpose of establishing business credit. If you are not required to be a C Corp or S Corp, this is the easiest and most cost-effective way to create the separation of business and personal credit that you need.

Separate Contact Information

There also needs to be a separate business address and email address. They cannot be the same as your personal address and email address. Also, the business email address should not be from Yahoo, Gmail, or any other free email service. It should have the same URL as your professional website. Don’t have a professional website? You need to get one of those too.

Be sure your business contact information is listed in the directories under the business name.

Business Bank Account

If you are running all of your business transactions through your personal bank account, stop. You need a dedicated business bank account that you use for all business transactions. This helps with the separation of your business from yourself, but it will also help you keep business expenses separate from personal expenses for ease during tax time.

Don’t Use All of Your Available Credit

When building business credit, the first thing you do is work through the credit tiers. The goal is to get as many accounts reporting consistent, on-time payments from your business name as possible. This means you get 8 to 10 accounts in the vendor credit tier, move up and get 8 to 10 accounts in the retail credit tier, and so on through the fleet credit tier, and finally the cash credit tier. You can find out more about the credit tiers and how the business credit building process works here.

While this achieves the purpose of building business credit, it also means you have a lot of business credit out there. Resist the temptation to use it all at once. You have to pace yourself. You want to make payments on each account, but you cannot carry balances at or near the limit on all those cards. If you do, your debt-to-credit ratio will be extra high, resulting in a negative impact on your credit report.

Do Get and EIN and a DUNS Number

These are identifying numbers for your business. You must have both of them to get business credit.

EIN

This is an identifying number for your business that functions much as your SSN does for you personally. Once you have it, you will use it in place of your SSN when you apply for credit in the name of your business. Your SSN should only be used for identity verification for fraud prevention. You may have to provide your birthdate for this reason as well, but not for the purpose of checking credit.

If you follow the other steps for establishing business credit and skip this one, accounts could end up on both reports. You don’t want that.

The process of applying for and EIN is easy. The IRS has an online form, and as soon as all the information is verified you receive your number. It typically happens almost immediately.

Get a DUNS Number

Dun and Bradstreet (D&B) is the largest and most widely used business credit reporting agency. They issue each business on file a 9-digit DUNS number, and you will not have a business credit file with them until you have this number. Application is easy and free on their website. Beware, they will try to sell you a lot of different products, but you only need the DUNS number and it is definitely free.

Do Work with Members of the Small Business Finance Exchange

Working with SBFE members can do more than help you get a new business credit score. Here are 4 ways working with members of the Small Business Finance Exchange can help your business, including that credit score you are working on. Find out more about the Small Business Finance Exchange and what they do here.

Build Business Credit

When you do business with members of the Small Business Finance Exchange, you know your information is being reported. That builds business credit. How do you know if your lender or vendor is a member? Ask them. If they are not, considered mentioning that they become a member. There are enough members in the network however, that it should not be hard to find one.

Grow Your Business

By working with SBFE members, you know that when creditors receive your information, they get a complete credit picture. If you are making your payments and working to build strong business credit, the additional data they receive can only help you.

Discover our business credit and finance guide, jam-packed with new ways to finance your business without emptying your wallet.

Increase Funding Options

The data available about your business from the Small Business Finance Exchange could open up additional funding opportunities that may not be available to you otherwise.

Help Making Wise Credit Decisions

If you are a small business that lends money to other businesses and has the ability to report that information, you can join the SBFE yourself. You will gain access to information about borrowers that is available exclusively to members. This information can help you make better decisions about your own business lending.

Do Monitor Your New Business Credit Score

Once you have business credit, you need to watch it to ensure it stays strong. If you already have a score and want a newer, stronger score, that is even more reason to monitor your credit report. Make certain all accounts are reporting accurate information, and deal with any mistakes as soon as you can.

You can monitor your business credit by getting reports from the credit reporting agencies directly, but it’s pricey. To monitor with D&B go to: www.dandb.com/credit-builder. For monitoring with Experian, visit: www.smartbusinessreports.com/Landing/1217/. At Equifax, you can monitor your account at: www.equifax.com/business/business-credit-monitor-small-business. Experian and Equifax cost about $19.99; D&B ranges from $49.99 to $99.99.

Another option is to use a credit monitoring service like the one offered by CreditSuite. We can help you monitor business credit at Experian and D&B for only $24/month.

None of It Matters If You Don’t Make Your Payments on Time

Whether you are starting from scratch or trying to do some repair work to get a new business credit score, none of it matters if you do not make your payments on time. This is an absolute necessity. If you are inconsistent or late with payments, you will not only undo any good, but you may actually end up in worse shape than before.

You have to have a plan in order to be successful with you new business credit score.

Here are some bonus Dos and Don’ts to help with this:

Do budget for credit payments. It is easy to forget this or let it get out of control quickly. As you grow your business credit score, you are going to have a lot of new credit available. You already know you do not have to use it all, but you have to be sure to budget and plan to pay for what you are using.
Do know how much you can handle in debt payment each month before taking on new debt. If you are considering taking on debt payments of $300 per month but you only have $200 per month in cash available for payments, you are going to have a problem.
Don’t use debt to pay debt. Of course, there could be times, such as 0% interest on balance transfer opportunities, that it may be useful. Make it an exception rather than the rule however. It isn’t a good habit to get into.

Discover our business credit and finance guide, jam-packed with new ways to finance your business without emptying your wallet.

Do use credit wisely. Yes, you need the accounts in the beginning for your new business credit score to grow, but there is no need to buy things you do not need. If what you are buying on credit will not grow or expand your business, leave it alone. It’s ridiculous to buy 7 boxes of latex gloves on credit if you will not use them in the course of your regular business.
Don’t stop monitoring your credit. Just once doesn’t do it. Credit monitoring needs to be an ongoing process, not just to catch mistakes, but so that you know what your credit score can handle at any given time.
Do consider automating payments. Most creditors offer some sort of direct draft option. Just be sure the funds are there!

Getting and Keeping a New Business Credit Score is Vital for Your Business

If you have bad business credit, or no business credit at all, you definitely need a new business credit score. It won’t happen on its own however. You have to be intentional. It isn’t hard, but there is a definite process that takes some time. If you are willing to put in the time and trust the process though, the resulting business credit score could open a world of possibilities for your business.

The post New Business Credit Score Do’s and Don’ts appeared first on Credit Suite.

FINALLY! Understand Your Business Credit Score!

What Does Your Business Credit Card Score Mean, and Where Does it Come From?

Imagine you are in a foreign country and have no understanding of the local language. Of course, you need the basic things such as food, water, and shelter just to survive. The problem is, you cannot ask anyone where to find them. Consequently, each time you try to get these things for yourself the door is shut in your face. You cannot explain yourself in order to get what you need, because you do not speak the language. Even if they did try to help you, you would have no clue what they were talking about. You wouldn’t understand. This what it is like when you do not understand your business credit card score.

Similarly, you need funding for your business to survive. A bad business credit card score can keep you from getting it. If you do not understand your score however, you cannot help yourself. For this reason, you need to know what the score means, what it says about your business, and how it is calculated. Once you understand these things, you can get to work correcting whatever barrier is in the way.

Where Does Your Business Credit Card Score Come from and What Does it Mean?

The truth is, it depends. As you likely know, there are various agencies that report personal credit scores. Likewise, there are several that report business credit scores as well. Most noteworthy are Dun & Bradstreet, Experian, Equifax, and CreditSafe. There are a few smaller, lesser known business CRAs. Certainly however, these are by far the largest and most commonly used by lenders.

That’s the easy part. Where your business credit card score comes from and what it means is a little more complicated. First of all, there are a ton of different scores. Also, different CRAs gather their information and calculate their scores differently. As a result, seeing your business credit card score can be very difficult. Understanding it can be even harder. Below, we break down what each score means and where the information comes from for each of the major credit reporting agencies.

Hit the jackpot with our best webinar and its trustworthy list of seven vendors who can help you build business credit.

Business Credit Card Score from Dun & Bradstreet

The report lenders use most is likely the PAYDEX. This is probably because it is the easiest to understand, due to it being the most like the consumer FICO score. It measures how quickly a customer makes payments and ranges from 1 to 100. Scores of 70 or higher are acceptable. For reference, a score of 100 shows payments are made in advance. A score of 1 indicates that they are 120, or more, late.

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

The financial stress score measures pressure on the balance sheet. Therefore, it shows how likely the company is to shut down within a year. These scores range from 5 to 1. A score of 2 is good.

● Supplier Evaluation Risk Rating

This rating ranks the odds of a company surviving 12 months. The minimum score is a 9 and the

maximum is 1. A good score is 5.

● Credit Limit Recommendation

The credit limit recommendation reflects a business’s borrowing capacity. Even more, it is a

recommendation for how much debt a company can handle. Typically, creditors use this to

determine how much credit to extend.

● D&B Credit Rating

This one ranks overall 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.

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. Due to the lack of information, this is based on number of employees. Alternatively, they may offer a rating based on what data is actually available.

Business Credit Card Score from Experian Commercial

Experian uses what it calls Intelliscore as its credit ranking. There are more than 800 different factors that they use to predict a company’s credit risk. With Intelliscore, a score of 76 or higher indicates a low risk of default or late payment. If a score falls between 51 to 75, it indicates a low to medium risk. Scores from 26 to 50 are medium risk. Finally, from 25 down to 1 is medium high to high risk.

Experian offers a number of other scores also.

● Intelliscore Plus

This is a highly predictive percentile score that indicates the likelihood that a business will go seriously delinquent, or have a major financial issue such as a bankruptcy within the next year.

Intelliscore Plus uses more factors to determine the score than the original Intelliscore. While payment history still accounts for 5 to 10%, 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.

Hit the jackpot with our best webinar and its trustworthy list of seven vendors who can help you build business credit.

● The Experian Financial Stability Risk Score (FSR)

FSR predicts the potential of a business going bankrupt or defaulting on its obligations. The score identifies the highest risk businesses by making use of payment and public records. These records include high utilization 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-page report that provides a summary of the business and its owner. A combined business-owner credit scoring model is more comprehensive than a business or consumer only model. Blended scores have been found to outperform consumer or business alone by 10 – 20%.

Equifax Business

Equifax gets its business credit data in ways similar to D&B and Experian. Like D&B, they also have a sharing agreement with the Small Business Finance Exchange. In addition, they get Net 30 type industry trade credit information from a wide variety of suppliers that provide products and services to businesses on an invoice basis.

They combine financial data with industry trade data, and they add in utility and telephone payment data. They also use public records information.

Equifax Business credit scores include:

● The Small Business Credit Risk Score for Suppliers

It is scored on a scale of 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 payment date. In the same way, It just goes down 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 shows your company’s credit usage. It gives a visual of 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 included as well.

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.

Business Credit Card Score: Credit Safe

CreditSafe does not gather its own information like the other CRAs. Rather, they offer reporting options based on data from Dun & Bradstreet. Since they compile the data and report it in different ways, these scores still offer information that may be used differently than what is found on a Dun & Bradstreet report. They offer 3 packages: Standard, Plus, and Premier. The problem is, they do not list their prices on the website. You have to request a quote to determine what your pricing would be, as they allow you to purchase individual products as well.

Their main score, the CreditSafe rating, works on a scale of 1-100. It predicts the likelihood that payment performance will become 90 plus days past due within the next 12 months, or that the business will go bankrupt. They offer a variety of other scores and reports that provide a ton of additional information.

● International Score

This score is derived from the Creditsafe rating. It compares credit risk between companies in different countries.

● Credit Limit

The Creditsafe recommended credit limit uses information from the business payment records and those of similar companies to calculate a dollar amount recommendation for the maximum amount of credit a company should receive at one time.

● Days Beyond Terms (DBT)

Compares how many days late a business pays its bills in comparison to other companies in the industry.

● Derogatory Legal

This is a report on the number and value of tax liens and judgements that have been filed in the past 6 years and 9 months. It also includes bankruptcies filed in the last 9 years and 9 months.

● Payment Trend

A report designed to highlight, at a glance, substantial changes in how a company is paying its bills.

● Business Spend Trend

Let’s you know whether the total annual business spending is going up or down when compared to the previous year.

Subscription packages come in levels, and the prices are dependent completely on your business’s individual needs. You have to speak to a consultant to get a quote.

Hit the jackpot with our best webinar and its trustworthy list of seven vendors who can help you build business credit.

Finally! You Understand Your Business Credit Card Score… Now How Can You See It?

Just understanding your business credit card score is not enough. You need to know what you can do about it if it isn’t helping you get funding. That’s where monitoring comes in. Unfortunately, you cannot get a free copy of your business credit reports like you can with your personal credit reports. It costs money to see your business credit card score.

For example, the big three charge closet 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.

CreditSafe doesn’t even tell you a price until you talk to one of their agents. They will quote you a price after discussing your needs with you. So it’s a subscription type package that you pay monthly.

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

What Can You Do About Bad Business Credit?

First off, if your business credit card score is bad because of mistakes, you can dispute them. In this way, you can have the mistakes taken off. Do this in writing to the credit reporting agency. In addition, you will need to include backup documentation that supports your point. Do not send originals however. Rather, send copies.

In contrast, if your credit is bad and there are no mistakes, start now making payments on time. Furthermore, if you have accounts that do not report to the credit agencies, such as telephone or utility accounts, ask them to report your on-time payments. If you pay rent, ask your landlord to report your rent payments. In addition, 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.

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

Knowledge is Power

Once you understand your business credit card score, you can start to figure out what you can do about it. So knowing is half the battle. The other half is getting the problem areas corrected. Once you do, your business can get the funding it needs to grow and thrive.

The post FINALLY! Understand Your Business Credit Score! appeared first on Credit Suite.

5 Amazing Ways You Can Get a Free Credit Score for Business

Get a Free Credit Score for Business – We Show You 5 Easy Ways to Do It

You can get a free credit score for business. There are 5 that entrepreneurs should understand.

Keeping your credit scores high is essential, so be sure you don’t miss any of these. You need to be proactive to get and improve any free credit score for business.

1. Free Credit Score for Business: Dun & Bradstreet’s PAYDEX

A PAYDEX Score from Dun & Bradstreet ranges from 0 to 100. This score has a basis in payment data which is on report to the bureau. Or it is on report to data-gathering companies partnering with the CRA. https://creditreports.dnb.com/m/business-glossary/paydex-score.html

D & B uses this data, along with a credit score and Financial Stress Score, so as to advise how much credit a loan provider should extend to your business.

Obtaining a Free Credit Score for Business from D&B’s PAYDEX

To get a PAYDEX score, you need to apply for a D-U-N-S number by using Dun & Bradstreet’s website. The number is at no cost. Plus the CRA will require to have reports of your payments with four or more merchants.

Your firm’s PAYDEX score reveals if your payments are usually made promptly or ahead of schedule. As you may expect, a higher number is better.

PAYDEX Score Information

The scores break down as follows:

80 – 100: A low risk of late payments
50 – 79: A medium risk of late payments
0 – 49: A high risk of late payments

D&B Business Credit Scores

Your company’s credit rating ranges from 1 to 5. 1 is the best score. This matches your business with other companies with comparable payment histories. The score shows just how often those firms tend to pay without delay.

This information can actually help loan providers to identify your company’s standing. Yet it does not really show every one of the payment records from your business.

Financial Stress Score

The Financial Stress Score also runs from 1 to 5. It matches your business with other companies sharing comparable financial and company characteristics.

These resemblances are in areas such as size or amount of time in business. This score shows just how regularly those businesses have a tendency to pay on time. As before, 1 is the very best score. This score is a more comprehensive examination of the business landscape, versus an analysis of your company’s real payment history.

An amazing PAYDEX score for your company is 80 – 100.

Find out why so many companies are using our proven methods to improve their business credit scores.

2. Free Credit Score for Business: Experian Credit Scores

Experian’s scoring system is called Intelliscore Plus. http://www.experian.com/business-information/credit-risk-management.html

What is the Intelliscore Plus Free Credit Score for Business?

The Intelliscore Plus credit score is a statistically based credit-risk assessment. The essential purpose of Intelliscore Plus is to aid companies, investors, and possible future loan providers make wise judgments regarding who they should or should not do business with.

Like an automobile dealer makes use of a customer’s FICO score to swiftly identify just how much of a credit risk a potential customer may be, the Intelliscore Plus credit score can offer insight on just how much of a credit risk a business or business owner might be.

Intelliscore Plus Credit Score Range

The Intelliscore scores vary from 1 to 100. So the higher your score, the lower your risk class. The chart below details each Intelliscore Plus credit score range as well as its associated meaning.

Score Range/Risk Class

76 – 100 Low
51 – 752 Low – Medium
26 – 503 Medium
11 – 254 High – Medium
1 – 105 High

Computing an Intelliscore Plus Credit Score

In the credit world, Intelliscore Plus is regarded one of the most dependable tools in effectively forecasting risk. Among the ways Intelliscore Plus maintains this claim to fame is by acknowledging the significant variables that show if a business is likely to pay their debts.

Though there more than 800 business and owner variables constituting an Intelliscore Plus credit score, the variables can be broken down into these essential elements:

Payment History

The bureaus call this recency however in the real world, it’s nothing more than your current payment status. This includes the number of times your accounts become delinquent, the number of accounts that are currently delinquent, and your overall trade balance.

Frequency

Similar to payment history, frequency make up the quantity of times your accounts have been sent to collections, the quantity of liens as well as judgments you may have, and any bankruptcies connecting with your business or personal accounts.

Frequency can also include information connecting to your payment patterns. Were you regularly slow or tardy with payment? Did you begin paying expenses late, yet over time, stopped doing so? These variables will certainly all be taken into consideration.

Monetary

This particular facet focuses on exactly how you use credit. As an example, just how much of your offered credit is presently in use? Do you have a high proportion of delinquent equilibrium in comparison with your credit line?

If you’re about to begin a company or are rather new to this game, the checklist above may appear a bit overwhelming. If you haven’t begun or don’t have a lengthy history of company-based purchases, exactly how will Intelliscore Plus rate you?

Intelliscore Plus handles these situations by using a “blended model” to develop your score. This implies that they take your consumer credit score right into consideration when determining your company’s credit score.

Find out why so many companies are using our proven methods to improve their business credit scores.

3. Free Credit Score for Business: Equifax Business Credit Scores

The Equifax Credit Risk Score originates from a model which they use to place specific risks. Equifax uses these details in its calculations, consisting of the depth of the credit details Experian can obtain the length of your company’s credit history, as well as your firm’s payment delinquency history. http://www.equifax.com/business/equifax-risk-score

http://www.equifax.com/assets/USCIS/efx-00178_efx_risk_score.pdf

http://www.equifax.com/assets/USCIS/efx-00164-9-13_efx_bni.pdf

Equifax then sectors some five separate scorecards together, by using statistical analysis. In order to enhance their precision, Equifax suggests combining their Credit Risk Score with their exclusive Equifax Bankruptcy Navigator Index.

The Bankruptcy Navigator Index helps forecast the likelihood of your business declaring bankruptcy in the next 24 months. Equifax bases its predictive model on over 270 million different accounts.

Equifax shows three separate company determinations on its business credit reports. These are the Equifax Payment Index, your business’s Credit Risk Score, and its Business Failure Score.

Equifax Payment Index

Comparable to the PAYDEX rating, Equifax’s Payment Index, which has its measurement on a scale of 100, shows how many of your firm’s payments were made punctually. These include both data from credit providers and suppliers.

However it’s not indicated to forecast future habits. That is what the other two scores are for.

Equifax Credit Risk Score

Equifax’s Credit Risk Score analyzes just how likely it is your business will become severely overdue on payments. Scores vary from 101 to 992, and they examine:

Available credit limit on revolving credit accounts, e. g. credit cards
Your business’s size
Proof of any kind of non-financial transactions (e. g. vendor invoices) which are delinquent or were on charge off for two or more payment cycles
Length of time since the opening of the earliest financial account

Find out why so many companies are using our proven methods to improve their business credit scores.

Equifax Business Failure Score

Finally, Equifax’s Business Failure Score looks at the risk of your company closing. It ranges from 1,000 to 1,600, assessing these aspects:

Total balance to total current credit limit average utilization in the previous three months
How much time since the opening of the oldest financial account
Your business’s worst payment status on all trades in the previous 24 months
Documentation of any non-financial transactions (e. g. supplier invoices) which are past due or have gotten on fee off for two or more billing cycles.

Equifax Scoring Analysis

For the credit risk as well as business failure scores, a rating of 0 means bankruptcy.

An amazing Equifax score for your firm is as follows:

Payment Index 0 – 10
Credit Score 892 – 992
Business Failure Score 1400 – 1600

4. Free Credit Score for Business: FICO Business Credit Scores

FICO uses its SBSS (Small Business Scoring Service) Score to integrate consumer bureau, economic, application, and business bureau data. FICO then validates their SBSS models for transactions such as Line of Credit transactions, Term Loans, and Commercial Card obligations which go up to $1 million. Their idea is to examine how your company pays back all kinds of loans. http://www.fico.com/en/node/8140?file=6045

Business credit providers make use of the FICO SBSS score as a tool to determine whether they should authorize a loan to your business at all.

The SBA uses this score too, to authorize or approve company loans. It has a basis in your company and consumer credit history as well as not simply your business’s financial health.

The score factors in the evaluation of the risks inherent in your company’s credit applications. With SBSS, lenders make their determinations in a matter of hours, instead of days. Lenders are more confident in their lending judgments, and your company gets quicker decisions on your loan applications.

The SBA’s Participation

The FICO Small Business Score or SBSS score is the main figure that the SBA thinks about while figuring out to approve a loan, especially when it involves the SBA’s 7(a) loans.

Computing a FICO SBSS Score

The FICO SBSS Score shows the likelihood or probability of you, the candidate, covering your month-to-month bills in a timely manner. The score runs from 0 to 300. A higher score means lower risks and commonly generates more favorable credit terms. The score originates from your company as well as personal history of credit use together with your company’s financial data. Variables also include your company’s age, and its years or complete time in business.

Since 2014, all SBA 7(a) loans must go through a business credit score pre-screen, as well as for SBA loans, you could perhaps not get an approval if you had a score less than 140. However the cutoff was typically set to 160, and frequently, a score below 160 meant a rejection. A lot of lending institutions will only accept scores over 160 or 180, to lend as much as $1 million. But a rating lower than 160 or 180 can still qualify you for a smaller loan.

The formula for the FICO SBSS Score is as follows:

The last year of PAYDEX scores from Dun & Bradstreet
Amounts and types of any judgements against your firm
The amounts and kinds of any liens against your company’s real or personal property.
Your firm’s available resources
Your company’s profit
Plus other, less distinct monetary information

If you have no document of company credit and had a modest or short time in your business, then the possible greatest FICO SBSS score you can possibly anticipate is 140.

Usage and Sorts of SBSS Model Lenders

A FICO SBSS rating includes the choice to opt for certain models which are market-specific for enhanced and better decision making. As an example, one model is an agricultural leasing and lending model. Another model was made especially for Canada. Additionally, the insights of the SBSS score provide support for the SBRI (Small Business Risk Insight, from Dun & Bradstreet) and the SBFE (Small Business Financial Exchange) information repositories.

Validating the SBSS models is necessary for credit lines, commercial cards, as well as term loans of as much as one million dollars. If you are asking for one million dollars or less from bank financing, then there are chances that your SBSS score will be under review.

The Kind of Information in the Score

The SBSS provides the credit issuers of businesses different information blends to make sure that they can analyze your company’s credit risks. For instance, a specific issuer of credit can choose only to assess a concept proprietor’s application data, or the credit issuer can choose to consist of one or multiple business bureaus’ information.

Or the credit issuer can only decide to prioritize one element over another. This intelligent rating originates from various business bureaus on an automated basis, in any type of order or whatever priority the issuer of the credit chooses. As a result, if the loan provider chooses the score of Dun & Bradstreet’s PAYDEX as its default, the SBSS will pull that set of data.

SBSS Credit Offer Index: Just How It Works and Why It Is Important

The Credit Index is an aspect of the FICO SBSS Credit Score for your small business, made to aid credit issuers understand your capacity. It works as the standards against all businesses with comparable profiles.

The SBSS Credit Offer Index includes economic application details, business bureau documents, and credit bureau information for consumer. It provides a percentile ranking of the present against other smaller companies with identical or similar features and total requested money from all those businesses.

The Updated SBSS

Reporting agencies like Experian power the newer FICO SBSS Score model. The SBFE data might be used to prepare for charge-offs, bankruptcy, or three plus cycles overdue or misbehavior over a duration of two years.

5. Free Credit Score for Business: SBA Credit Scoring

The SBA’s tool has a basis in FICO. Their idea is to speed up their credit decisions for loan approvals. The tool uses several information sources and over one hundred combinations of company and consumer analytical models. They use a designated cutoff. https://www.sba.gov/offices/district/mo/st-louis/resources/small-business-loan-credit-scoring

Their general stats on their over $60 billion profile show that companies with ratings at, or above the assigned cut-off will have excellent payment history. So in a way, this isn’t a free credit score for business – it’s more of a score derived from other scores.

Just How Do You Enhance Your Business Credit Scores?

The big question has arrived, and while there is no golden solution, these concepts can definitely assist you increase your rating.

Make Your Payments on Schedule

Your payment patterns and history are a driving force in your overall credit score. Over time, paying your bills promptly will help establish your company as one that pays their financial obligations. This will inevitably help push your rating up as well as show other firms you are a low risk.

Keep Your Debt-to-Income Ratio in Check

The more debt you have on your plate, the more invoices you have, and the less disposable income you have. If your total debt approaches or exceeds your income level, then you’re more than likely to be seen as high-risk.

Keep your financial obligations in check and consistently pay them off to keep a healthy balance between what you make and what you owe.

Use Your Credit

Keeping your financial obligations low remains sound advice. Still, opening and sensibly benefiting from business credit accounts can help you broaden your available credit and improve your credit score.

Maintain a Healthy Personal Credit Profile

By now, you know that your own personal credit is fair game when it involves your Intelliscore Plus rating. Running a company is difficult work, however don’t let your personal finances suffer. Make certain that you remain on top of your individual monthly bills, stay clear of unnecessary credit inquiries, and refrain from compromising your personal credit for business needs.

Check Your Credit Reports

Regardless of what your credit score is, it is critical that you continue to be attentive and evaluate your personal and business credit reports. This can help you locate possible problems and stay educated by yourself credit profile.

Free Credit Score for Business: Takeaways

When you recognize where to check your free credit score for business, you have a much better chance of getting on top of it, and staying there.

The post 5 Amazing Ways You Can Get a Free Credit Score for Business appeared first on Credit Suite.

How to Get and Read Your FREE Business Credit Reports and Understand Your Score

And How to Understand Your Score

Most people know they have a personal credit score. Many business owners do not know, however, that they may have a business credit score. This is a score very similar to your personal FICO, but it is related to your business financial transactions only. It is not connected to your personal finances at all. In fact, free business credit reports are not even connected to your social security number.

The problem is, unlike your personal credit reports, it can be difficult to determine what business credit reports have one them. It is easy to get a copy of your FICO report for free. It is not so easy to do the same with business credit reports.

Where Do Your Free Business Credit Reports Come From?

Just as there are credit reporting agencies for your personal credit score, there are also business credit reporting agencies. The largest one, and the one lenders use most often, is Dun & Bradstreet. However, there are actually several others. The other two most common are Experian and Equifax.

They do not just give out credit reports for free however. In fact, the prices for reports directly from the top 3 most commonly used credit reporting agencies are pretty steep. For example:

Hit the jackpot with our best webinar and its trustworthy list of seven vendors who can help you build business credit.

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.

The prices range so broadly due to the varying complexity and detail of the information provided in each report. For example, Dun & Bradstreet has multiple types of scores and a report for each one.

How to 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. There are ways to see what is on it, one time, for free however.

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

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 cancelation 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 are 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.

CreditSafe

You do have to pay for an ongoing subscription to CreditSafe, but they will give you a free credit report to get you started. It will only include Dun & Bradstreet, but it is a good taste of what you can see with a full subscription. It is also another option for a free copy of your business credit report. If you do subscribe, they have a number of reports that are unique to them. This means you are getting something that you may not get with the other monitoring services or even the standard reports from the Dun & Bradstreet, Experian, or Equifax.

Business Loan Denial

As mentioned before, you can get a free copy of your business credit reports if a lender denies you for a business loan. This is the less 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 denial. You have 90 days to submit your request.

How To Read Your Free Business Credit Reports

Each reporting agency offers different types of reports and information, but they all contain the same general data.

Dun & Bradstreet

The report most use is the PAYDEX. This is likely because it is the easiest to understand, due to it being the most like the consumer FICO score. It measures how quickly a customer makes payments and ranges from 1 to 100. Scores of 70 or higher is acceptable. For example, a score of 100 shows payments are made in advance, and a score of 1 indicates that they are 120 days late, or more.

Hit the jackpot with our best webinar and its trustworthy list of seven vendors who can help you build business credit.

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. The scale is 1 to 5, and a 2 is good.

Financial Stress Score

The financial stress score is measures pressure on the balance sheet. It shows how likely the company is to shut down within a year. These scores range from 5 to 1, with a score of 2 being “good.”

Supplier Evaluation Risk Rating

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

Credit Limit Recommendation

The credit limit recommendation reflects a business’s borrowing capacity. It is a recommendation for how much debt a company can handle. Typically, creditors use this to determine how much credit to extend.

D&B Credit Rating

This one ranks overall 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.

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.

Experian

Experian’s uses what it calls Intelliscore as its credit ranking. There are more than 800 different factors that they use to predict a company’s credit risk. With Intelliscore, a score of 76 or higher indicates a low risk of default or late payment. If a score falls between 51 to 75, it indicates a low to medium risk. Scores from 26 to 50 are medium risk, and from 25 down to 1 is medium high to high risk.

Here is where Experian gets tricky. Intelliscore is a blended score of both the business and business owner’s personal information. That means it offers insights into a business’s public record findings, collections, and payment trends, as well as overall business background. Experian is also unique in that it does not ask businesses to self-report. Instead, they collect all the information themselves. You will have to give permission for a lender to view this report, due to it containing personal information.

Equifax

Equifax collects information similar to Dun and Bradstreet, including: information from public records, financial data from the business, and payment history from creditors. Credit utilization is also a factor, which accounts for how much credit you are using versus the amount of credit you have available to use.

The information is used to calculate various scores, including the business credit risk score and the business failure score. The first measures how likely it is that a business will become 90 days or more delinquent on bills over the next year. The score ranges from 101 to 992. The second ranges from 1,000 to 1610 and predicts how likely it is that the business will file for bankruptcy over the next 12-month period. A lower score indicates higher risk.

They also calculate what they call the business payment index. This is the Equifax version of Dun & Bradstreet’s PAYDEX. It even runs on the same scale of 0 to 100. This is an indicator payment history over the past year. It is different from the PAYDEX, however, in that you must to reach a score of 90 or higher for it to be a “good” score.

In addition, Equifax offers business identity reports to confirm a company actually exists. It verifies details such as the company’s tax ID, number of employees, and yearly sales.

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

A Note on CreditSafe

CreditSafe offers reporting options based on your Dun & Bradstreet score. They offer 3 packages, Standard, Plus, and Premier. The problem is, they do not list their prices on their website. You have to request a quote to determine what your pricing would be, as they also allow you to purchase individual products as well.

Since their reporting is based on information from Dun & Bradstreet, they are not technically a credit reporting agency themselves. However, since they do have their own reports, they are a little different from a straightforward credit monitoring company as well. They are quickly growing in popularity. No doubt that is partly due to the subscription service it offers, which allows easy insight into your own company’s credit report. The free trial allows for test driving, which sweetens the deal even more.

Their main score, the CreditSafe rating, works on a scale of 1-100. It predicts the likelihood that payment performance will become 90 plus days beyond terms within the next 12 months or that the business will go bankrupt. They offer a variety of other scores and reports that provide a ton of information however.

CreditSafe Free Business Credit Reports

International Score

This score is derived from the Creditsafe rating. It allows for a comparison of credit risk between companies that are registered in different countries.

Credit Limit

The Creditsafe recommended credit limit uses information from the business payment records and those of similar companies to calculate a dollar amount recommendation of the maximum amount of credit a company should receive at any one time.

Days Beyond Terms (DBT)

Compares how many days late a business pays its bills in comparison to other companies in the industry.

Derogatory Legal

This is a report on the number and value of tax liens and judgements that have been filed in the past 6 years and 9 months. It also includes bankruptcies filed in the last 9 years and 9 months

Payment Trend

A report designed to highlight at a glance substantial changes in how a company is paying its bills.

Business Spend Trend

Let’s you know whether the total annual business spending is going up or down when compared to the previous year.

Subscription packages come in levels, and the prices are dependent completely on your business’s individual needs. You will have to speak to a consultant to get a quote.

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Seeing Your Free Business Credit Reports is Necessary to Taking the Pulse of Your Business

It’s true, a solid business credit score does not always indicate a healthy bottom line. What it does indicate, however, is the propensity for growth. If your business credit reports don’t look so hot, you are going to have a hard time getting funding to expand and grow. Stagnant businesses are doomed to die, meaning your business credit reports could very likely be your lifeline. Knowing how to access them for free is important. However, it is important enough to know what is on your business credit reports that for most, they are actually worth paying for.

The post How to Get and Read Your FREE Business Credit Reports and Understand Your Score appeared first on Credit Suite.

How to Get and Read Your FREE Business Credit Reports and Understand Your Score

And How to Understand Your Score Most people know they have a personal credit score. Many business owners do not know, however, that they may have a business credit score. This is a score very similar to your personal FICO, but it is related to your business financial transactions only. It is not connected to … Continue reading How to Get and Read Your FREE Business Credit Reports and Understand Your Score