15 – Business Credit Score
Different from a personal credit score, your business credit score is focused on precisely what—your business. This means it takes into account your timelines as far as payments to creditors and suppliers. Have you missed payments? Is everything up to date? Additionally, a business credit score may factor in the overall revenue stream, your industry, and size.
Some may not even realize that their business has a score per se; however, it is important to understand that agencies do start to create a file when you open a bank account for instance, or perhaps you’ve obtained a new employer identification number.
In terms of business scores, disparate from personal scores, the main reporting agencies are Dun & Bradstreet, Experian, and Equifax. Dun & Bradstreet, as well as Experian both, use a 0 to 100 scoring scale. Equifax diverges from this and utilizes a range of 3 scores with differing scales. Keep in mind too that there is a FICO Small Business Scoring Service (SBSS). This score is particularly popular with lenders primarily because it is based upon a combination of scores, to include: scores from the 3 agencies in addition to your personal score. It is thus understood as a more comprehensive means of evaluating your company’s ability to repay a loan.
Unlike with your personal score, business scores can be pulled at any time, and are far less regulated. So you want to stay on top of your company’s score. At First Union, we believe in looking at all aspects of our client’s business—which means a score will not prevent you from getting funded. We would love to discuss your option and let you see what our loan program can do for you. Call today!
You’re reading part 15 of our 18-part series: 18 Business Loan Requirements.