Free Resources to Check Your Business Credit Score
Entrepreneurs face a constant stream of challenges every day. In the early days of a new business, keeping the doors open and staying on top of paperwork are both full time jobs. But if your business credit score is hurting your ability to procure supplies and equipment, or forcing you to delay necessary expansion, it can hamper your ability to stay viable. Here are some important resources to help you know where you stand, what your score means, and how to improve it.
Credit Monitoring Services
Before we go any further, we need to make the distinction between a business credit score and a business credit report. You’re probably at least somewhat familiar with personal credit scoring, which impacts your ability to secure loans and credit at good interest rates. The FICO credit score for individuals range from 300 to 850, with anything over 700 being considered excellent, and anything below 600 poor.
Business credit scores are determined by the three major credit reporting bureaus, Dun & Bradstreet, Experian, and Equifax Small Business. In business, credit scores have a range of 0-100. Anything over 75 is excellent. Each of the credit bureaus have a service that will allow you to pull your score. The service “Nav” will give you your Experian score and summary, while Dun & Bradstreet has a program called CreditSignal which is designed to alert you when your business credit score changes.
The important thing to note is this: you can access your score for free easily. In some cases, you can get your summary for free. But to examine the full report (which may be necessary if you need to dispute something) you will have to pay a premium.
Components of Business Credit Scores and Reports
If you’re wondering what your business credit report (and therefore, your score) is comprised of, the answer is that there are three major components: credit, which is much like personal credit. How much can you borrow, and how much do you owe? Public transactions, which list legal financial concerns like liens and bankruptcies. Finally, demographic information like the number of years you have been in business, and your business size relative to other comparable companies.
Improving Your Score
If your score is not what you would like it to be, much like personal credit, the best thing you can do is pay bills on time and wait. Inquiries, liens, and even bankruptcies fall off the reports after a certain number of years.