Tag: What’s

How to Check Business Credit Score: Know What’s Going On

It is important to know how to check business credit score for a few reasons.  First, you just need to know what is going on with your business credit. Why does it matter?  Because business credit is one of many things that can affect the fundability of your business.  Do you know how to check business credit score reports? 

How to Check Business Credit Score: Your Fundability Will Thank You

Here’s the thing.  While a lot of things affect the fundability of your business, not all the things affect it equally.  Truly, there are many pieces to the puzzle. Business credit is like one big piece that fits right in the middle.  As a result, you have to know how to check it to get a feel for what is happening with your fundability.

Keep your business protected with our professional business credit monitoring.

How to Check Business Credit Score: What You Need to Know

How to Check Biz Credit Score Credit SuiteHowever, before we dive into how to check business credit, there are a few things you need to know.  For example, there are a lot of companies that issue a credit score for your business.  Next, each company offers more than one report.  Lastly, these reports contain much more information than just the credit score.  

Furthermore, there is no way to know which company a lender will use to check your business credit.  It could be all, one, or any combination. In addition, lenders actually apply their own formula to the information in the report to calculate a score that they feel is most useful to them.  As a result, they may not even use the score you see after you figure out how to check it.  

Honestly, all of these things are out of your control.  What you can control, to a point, is the information on the report.  Like, does it contain positive information?  Is the information on it accurate?  See, these are things you can work with. If the information lenders are seeing is both positive and accurate, you should be in good shape. Still, you cannot do anything about the information on the reports unless you know how to check your business credit score.  Then, you need to understand what it means, how it is calculated, and how lenders use it.  So here we go. 

How to Check Business Credit Score: Dun & Bradstreet

Basically, Dun & Bradstreet offers six different reports. For sure, the one utilized most often by lenders is the PAYDEX. Likely, this is due to the fact that it is the one most like the consumer FICO score. Similarly, it measures how quickly a company pays its debt on a scale of 1 to 100. Mostly, lenders like to see a score of 70 or higher.  To put it in perspective, a score of 100 reveals the firm makes payments ahead of time. A rating of 1 shows they pay 120 days late, or more.

Together with PAYDEX, they offer the following.

Delinquency Predictor Score

This rating determines the likelihood the company will not pay, will be late paying, or will come under bankruptcy. For scoring, the range is 1 to 5, with 2 being a good score.

Financial Stress Score

As you might imagine, this is a measurement of the stress on a firm’s balance sheet. It shows the possibility of shutting down within a year. The range is 1 to 5, and a 2 is good.

Supplier Evaluation Risk Rating

In contrast, this is a ranking that predicts odds of a firm surviving one year.  It ranges from 1 to 9, with a 5 being a good score.

Credit Limit Recommendation

As the name implies, this is a recommendation for the amount of debt a company can handle. Financial institutions usually use it to establish how much credit to extend.

D&B Credit Rating

This is an estimation of overall business risk on a scale of 4 to 1, where a 2 is considered good.  The smaller the number the better.  The rating is given in conjunction with letters, the combination of which shows a company’s net worth. 

Consequently, if there isn’t enough data on a company to give it  a rating, an alternative score is assigned. This is called a credit approval score.  It is based on the number of employees. They will use any data they have available to calculate this alternative rating.  That means, a company can control this to a point by ensuring D&B has all of the information they need.

Keep your business protected with our professional business credit monitoring.

Commercial Credit Score

Along with the PAYDEX, Dun & Bradstreet releases a commercial credit report.  It has three parts. Each shows how likely the business is to default on expenses or become seriously late on payments.

Commercial Credit Score

On a range of 101 to 670, the commercial credit score anticipates the likelihood of a firm making late payments. A rating of 101 indicates it is very likely that this will happen. Likewise, a score of around 500 is good.

Commercial Credit Percentile

For this, the scale goes from 0 to 100. It shows the chance of delinquency too. However, it determines this versus other companies in the Dun & Bradstreet system. A rating of 1 is the highest possible probability versus other companies. The majority of loan providers believe a rating of 80 or higher is good.

Commercial Credit Class

Basically, this is an way of dividing businesses into classes based on the chance of delinquency. Firms in class 1 are the least likely to be overdue. Likewise, if you are in class 2, that’s great.

How to Check Business Credit Score: Experian Business Credit Scores

Experian gathers data from a lot of the same sources as Dun & Bradstreet. As a result, their reports are similar.  There are a few key differences in sources, calculation, and also presentation however.

Intelliscore Plus

For example, Experian uses the Intelliscore Plus credit score.  It shows statistics-based credit risk. As a result, it is a highly predictive score that can help users make well-informed credit decisions. 

The Intelliscore scores range from 1 to 100, with a higher score indicating a lower risk class. 

Score Range Risk Class

Low Risk 76-100
Low-Medium Risk 51-75
Medium Risk 26-50
High-Medium Risk 11-25
High Risk 1-10

 

Experian’s Blended Score

The blended score is a one-page report.  It provides a summary of the business and its owner.  A combined business-owner credit scoring model works better than a business or consumer only model.  In fact, blended scores typically outperform consumer or business scores alone by 10 – 20%.

Experian Financial Stability Risk Score (FSR)

FSR predicts the potential of a business going bankrupt or not paying its debts.  Consequently, this score identifies the highest risk businesses by using payment and public records. They look at a number of variables, some of which include: 

  • high use of credit lines
  • severely late payments 
  • tax liens 
  • judgments 
  • collection accounts 
  • risk industries 
  • length of time in business 

How to Check Business Credit Score: The Equifax Service Credit Rating

Similarly, Equifax shows three different points on its corporate credit report. These include: 

Equifax Payment Index

Similar to PAYDEX, Equifax’s payment index is a measurement on a scale of 100. It shows how many of your small business’s payments were made on time. Like the others, it uses data from both creditors and vendors. However, it’s not meant to anticipate future behavior.  In fact, that is what the other two scores are for.

Equifax Credit Risk Score

This score shows the likelihood of your company becoming severely delinquent on payments. Scores range from 101 to 992 and include an evaluation of:

  • Available credit limit on revolving credit accounts, including credit cards
  • Company size
  • Proof of any non-financial transactions that are late or were charged off for two or more billing cycles
  • Length of time since the opening of the oldest financial account

Equifax Business Failure Score

Equifax’s business failure score takes a look at the risk of your business shutting down. It runs from 1,000 to 1,600 and bases its scoring on these factors:

  • Total balance to total current credit limit in the past three months
  • The amount of time since the opening of the oldest financial account
  • Your small business’s worst payment status on all trades in the last 24 months
  • Proof of any non-financial transactions (like merchant invoices) which are late or are on a charge off for two or more billing cycles

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

Equifax Scores

A positive Equifax score for your business is as follows:

  • Payment Index 0 to 10
  • Credit Risk score 892 to 992
  • Business Failure score 1400 to 1600

Are These the Only Agencies That Issue Business Credit Reports? 

In short, no.  Actually, there are a lot of other agencies that will issue a business credit score.  Furthermore, part of knowing how to check business credit score is knowing which company you need to check with.   These, however, are known as the big three.  If you want to view your whole report, including your score, you can pay for a credit report. Since these are the most commonly used, you need one from each of them. Still, there has been an increase in the use of another option recently.  It’s the FICO SBSS.

Keep your business protected with our professional business credit monitoring.

How to Check Business Credit Score: FICO SBSS?

First, the FICO SBSS is the business variation of your personal FICO credit report. However, unlike your personal FICO, the SBSS reports on a scale of 0 to 300. The higher the score the better. Still, the majority of loan providers demand a rating of least 160.

Exactly how is the FICO SBSS Scored?

Surprisingly, it is significantly different from other business credit scoring designs. For example, the SBSS utilizes your corporate credit score and individual credit rating. In addition, it makes use of monetary details like business assets and income. As you can see, the goal is to give an overall financial picture with one rating.

Business owners cannot access their FICO SBSS by themselves. There is a proprietary formula for score computations. FICO does not make that information public. The result is, you go into lending institutions blind as to what your FICO SBSS credit rating might be. 

Furthermore, lenders can choose how certain factors are weighted in the computation of your score.  This means your FICO SBSS could actually be different from one lender to the next. For example, one lender could put more weight on your business payment history, while another could lean more on your personal credit score. 

What does all of this mean?  It means that you actually cannot check your business credit score from FICO SBSS yourself.  The best you can do is handle your credit responsibly and make sure the other aspects of fundability are in order.  If all you put out there going forward is positive information, your FICO SBSS should follow suit and be positive as anything negative drops off over time. 

How to Check Business Credit Score: Credit Monitoring

If you want to know how to check business credit score on an ongoing basis, credit monitoring is the answer. Typically, you can check your score at any time with a credit monitoring service.  Each of the big three has one, but you certainly save money with a third-party business credit monitoring option.  Also, you may be able to see your scores from more than one agency in one place. 

How to Check Business Credit Score: What’s Important

Honestly, you have to know how to check business credit score.  However, even more importantly, you need to know how it is calculated, what it tells lenders, and how to fix it if it isn’t good.  Generally, high scores result in easier approval. So, if you do not have a high score, pay for a copy of your report and figure out why. Then, have mistakes corrected.  If the probably is payment history, then start now paying your obligations on-time, regularly.  

Of course, if you have yet to set up your business as an entity separate from you as the owner, then you likely don’t even have an actual business credit report.  That’s right. Most likely everything is simply being reporting to your personal credit report.  If you and your business share contact information and a bank account, and if you are not incorporated, this is likely the case.  Get those things taken care of, and then you’ll be able to start the process of building business credit.

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What’s Behind The Protests Against Stay-At-Home Orders

These protests have popped up around the country. How coordinated are they? Diane asks Jane Coaston, Vox senior political reporter.

The post What’s Behind The Protests Against Stay-At-Home Orders appeared first on Buy It At A Bargain – Deals And Reviews.

What’s the Best Way to Build Business Credit? We Have the Secret!

Learn the Best Way to Build Business Credit We can show you the best way to build business credit! Get the kind of business funding that can take your business to new heights! The Best Way to Build Business Credit – But What’s Business Credit, Anyway? Small business credit is credit in a business’s name. … Continue reading What’s the Best Way to Build Business Credit? We Have the Secret!

What’s the Best Way to Build Business Credit? We Have the Secret!

Learn the Best Way to Build Business Credit

We can show you the best way to build business credit! Get the kind of business funding that can take your business to new heights!

The Best Way to Build Business Credit – But What’s Business Credit, Anyway?

Small business credit is credit in a business’s name. It doesn’t link to a business owner’s personal credit, not even if the owner is a sole proprietor and the sole employee of the small business.

Accordingly, a business owner’s business and individual credit scores can be very different.

The Benefits

Because business credit is distinct from consumer, it helps to secure a business owner’s personal assets, in the event of a lawsuit or business bankruptcy.

Also, with two separate credit scores, a business owner can get two different cards from the same merchant. This effectively doubles buying power.

Another benefit is that even start-ups can do this. Heading to a bank for a business loan can be a recipe for frustration. But building company credit, when done the right way, is a plan for success.

Individual credit scores rely on payments but also various other factors like credit usage percentages.

But for company credit, the scores actually just hinge on whether a company pays its debts on a timely basis.

The Best Way to Build Business Credit – The Process

Building business credit is a process, and it does not occur automatically. A business will need to actively work to build company credit.

Nonetheless, it can be done easily and quickly, and it is much speedier than building consumer credit scores.

Merchants are a big aspect of this process.

Undertaking the steps out of order will lead to repetitive rejections. Nobody can start at the top with business credit. For example, you can’t start with retail or cash credit from your bank. If you do, you’ll get a denial 100% of the time.

The Best Way to Build Business Credit – Enhancing Company Fundability

A company must be fundable to credit issuers and vendors.

Therefore, a company will need a professional-looking web site and email address. And it needs to have site hosting bought from a vendor like GoDaddy.

Also, business telephone and fax numbers must have a listing on ListYourself.net.

Also, the business telephone number should be toll-free (800 exchange or comparable).

A business will also need a bank account dedicated strictly to it, and it needs to have all of the licenses essential for operation.

Licenses

These licenses all have to be in the exact, appropriate name of the company. And they need to have the same business address and telephone numbers.

So bear in mind, that this means not just state licenses, but possibly also city licenses.

Learn more here and get started toward establishing small business credit.

The Best Way to Build Business Credit – Working with the IRS

Visit the IRS website and get an EIN for the small business. They’re totally free. Select a business entity such as corporation, LLC, etc.

A company can begin as a sole proprietor. But they will more than likely wish to change to a type of corporation or an LLC.

This is in order to limit risk. And it will optimize tax benefits.

A business entity will matter when it pertains to taxes and liability in case of litigation. A sole proprietorship means the owner is it when it comes to liability and tax obligations. No one else is responsible.

Sole Proprietors Take Note

If you operate a business as a sole proprietor, then at the very least be sure to file for a DBA. This is ‘doing business as’ status.

If you do not, then your personal name is the same as the company name. Hence, you can wind up being personally accountable for all small business debts.

In addition, according to the IRS, by having this arrangement there is a 1 in 7 possibility of an IRS audit. There is a 1 in 50 possibility for corporations! Avoid confusion and significantly reduce the chances of an Internal Revenue Service audit as well.

The Best Way to Build Business Credit – Starting Off the Business Credit Reporting Process

Begin at the D&B website and obtain a cost-free D-U-N-S number. A D-U-N-S number is how D&B gets a small business into their system, to produce a PAYDEX score. If there is no D-U-N-S number, then there is no record and no PAYDEX score.

Once in D&B’s system, search Equifax and Experian’s web sites for the business. You can do this at www.creditsuite.com/reports. If there is a record with them, check it for correctness and completeness. If there are no records with them, go to the next step in the process.

By doing this, Experian and Equifax will have something to report on.

Vendor Credit Tier

First you should build trade lines that report. This is also known as the vendor credit tier. Then you’ll have an established credit profile, and you’ll get a business credit score.

And with an established business credit profile and score you can begin to obtain credit in the retail and cash credit tiers.

These kinds of accounts tend to be for the things bought all the time, like marketing materials, shipping boxes, outdoor work wear, ink and toner, and office furniture.

But first off, what is trade credit? These trade lines are credit issuers who will give you starter credit when you have none now. Terms are often Net 30, versus revolving.

Hence, if you get approval for $1,000 in vendor credit and use all of it, you need to pay that money back in a set term, like within 30 days on a Net 30 account.

Details

Net 30 accounts have to be paid in full within 30 days. 60 accounts need to be paid in full within 60 days. In comparison with revolving accounts, you have a set time when you have to pay back what you borrowed or the credit you made use of.

To begin your business credit profile the proper way, you should get approval for vendor accounts that report to the business credit reporting agencies. When that’s done, you can then make use of the credit.

Then pay back what you used, and the account is on report to Dun & Bradstreet, Experian, or Equifax.

Best Way to Establish Company Credit Suite

Vendor Credit Tier – It Helps

Not every vendor can help in the same way true starter credit can. These are vendors that will grant an approval with very little effort. You also need them to be reporting to one or more of the big three CRAs: Dun & Bradstreet, Equifax, and Experian.

You want 5 to 8 of these to move onto the next step, which is the retail credit tier. But you may have to apply more than once to these vendors. So, this is to verify you are dependable and will pay punctually. Here are some stellar choices from us: https://www.creditsuite.com/blog/5-vendor-accounts-that-build-your-business-credit/

The Best Way to Build Business Credit – Accounts That Do Not Report

Non-Reporting Trade Accounts can also be helpful. While you do want trade accounts to report to a minimum of one of the CRAs, a trade account which does not report can yet be of some worth.

You can always ask non-reporting accounts for trade references. And also credit accounts of any sort will help you to better even out business expenditures, thereby making budgeting less complicated. These are companies like PayPal Credit, T-Mobile, and Best Buy.

Retail Credit Tier

Once there are 5 to 8 or more vendor trade accounts reporting to at least one of the CRAs, then move to the retail credit tier. These are service providers like Office Depot and Staples.

Just use your SSN and date of birth on these applications for verification purposes. For credit checks and guarantees, use the small business’s EIN on these credit applications.

One good example is Lowe’s. They report to D&B, Equifax and Business Experian. They need to see a D-U-N-S and a PAYDEX score of 78 or higher.

Fleet Credit Tier

Are there 8 to 10 accounts reporting? Then move to the fleet credit tier. These are companies such as BP and Conoco. Use this credit to purchase fuel, and to fix, and maintain vehicles. Only use your SSN and date of birth on these applications for verification purposes. For credit checks and guarantees, make sure to apply using the business’s EIN.

One such example is Shell. They report to D&B and Business Experian. They want to see a PAYDEX Score of 78 or better and a 411 business phone listing.

Shell might say they want a specific amount of time in business or revenue. But if you already have enough vendor accounts, that won’t be necessary. And you can still get approval.

Learn more here and get started toward establishing small business credit.

Cash Credit Tier

Have you been responsibly handling the credit you’ve up to this point? Then move to the cash credit tier. These are businesses such as Visa and MasterCard. Just use your SSN and date of birth on these applications for verification purposes. For credit checks and guarantees, use your EIN instead.

One example is the Fuelman MasterCard. They report to D&B and Equifax Business. They want to see a PAYDEX Score of 78 or higher. And they also want you to have 10 trade lines reporting on your D&B report.

Plus, they want to see a $10,000 high credit limit reporting on your D&B report (other account reporting).

Additionally, they want you to have an established company.

These are businesses such as Walmart and Dell, and also Home Depot, BP, and Racetrac. These are normally MasterCard credit cards. If you have 14 trade accounts reporting, then these are doable.

Learn more here and get started toward establishing small business credit.

The Best Way to Build Business Credit – Monitor Your Business Credit

Know what is happening with your credit. Make certain it is being reported and deal with any inaccuracies ASAP. Get in the habit of taking a look at credit reports and digging into the specifics, and not just the scores.

We can help you monitor business credit at Experian and D&B for 90% less than it would cost you at the CRAs. See: www.creditsuite.com/monitoring.

At Equifax, you can monitor your account at: www.equifax.com/business/business-credit-monitor-small-business. Equifax costs about $19.99.

Update Your Data

Update the data if there are mistakes or the data is incomplete. At D&B, you can do this at: https://iupdate.dnb.com/iUpdate/viewiUpdateHome.htm. For Experian, go here: www.experian.com/small-business/business-credit-information.jsp. So for Equifax, go here: www.equifax.com/business/small-business.

The Best Way to Build Business Credit – Fix Your Business Credit

So, what’s all this monitoring for? It’s to challenge any inaccuracies in your records. Mistakes in your credit report(s) can be taken care of. But the CRAs normally want you to dispute in a particular way.

Get your company’s PAYDEX report at: www.dnb.com/about-us/our-data.html. Get your company’s Experian report at: www.businesscreditfacts.com/pdp.aspx?pg=SearchForm. And get your Equifax business credit report at: www.equifax.com/business/credit-information.

Disputes

Disputing credit report inaccuracies generally means you mail a paper letter with duplicates of any proof of payment with it. These are documents like receipts and cancelled checks. Never mail the original copies. Always send copies and keep the original copies.

Fixing credit report inaccuracies also means you precisely itemize any charges you dispute. Make your dispute letter as clear as possible. Be specific about the concerns with your report. Use certified mail so that you will have proof that you mailed in your dispute.

The Best Way to Build Business Credit – A Word about Building Business Credit

Always use credit smartly! Don’t borrow more than what you can pay off. Monitor balances and deadlines for payments. Paying promptly and in full will do more to raise business credit scores than nearly anything else.

Building company credit pays. Good business credit scores help a small business get loans. Your credit issuer knows the small business can pay its financial obligations. They recognize the small business is bona fide.

The business’s EIN links to high scores and lenders won’t feel the need to ask for a personal guarantee.

The Best Way to Build Business Credit – Takeaways

Business credit is an asset which can help your company for many years to come. Learn more here and get started toward growing small business credit.

 

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