Learn Business Credit

Business Credit is the Lifeblood of Your Business

Building and maintaining strong business credit is one of the most important things you can do for your business. Even so, very few business owners are aware of how truly valuable it can be for the long term viability of their business. A robust credit rating can help your company secure financing, save money by lowering costs and terms, establish and maintain meaningful professional relationships, and most importantly, it can help your business prosper and grow.

What Is Business Credit

You may be asking yourself – just what is business credit? Credit for your business, much like personal credit, is a credit worthiness score affixed to your business by one of the reporting bureaus. This score is one of the single most important determining factors banks, lenders, and suppliers utilize when making decisions on credit and payment terms. As you know from experience with personal credit, good scores get good results and bad scores get bad results.

How Business Credit Is Established

Business credit is established by considering a wide range of variables including:

  • Payment History
  • Credit Utilization Ratio
  • Accurate Reporting Information
  • Age of Business
  • Industry Success and Risk
  • Length of Business Relationships

american-express-89024_960_720[1]These are just a few of the many variables considered when credit reporting bureaus determine a score for your business. As you can imagine, some can be repaired and managed, others simply require time and consistency.

Major Credit Bureaus

The three main business credit reporting bureaus are FICO® SBSS, D&B PAYDEX®, and Experian Intelliscore Plus℠. Each uses different methodologies to formulate a credit score for your business.

FICO SBSS

FICO is one of the most trusted names in the credit reporting industry. Using their LiquidCredit decision engine, FICO assigns your business an SBSS score based on a number of fluid factors. This highly flexible score is quickly becoming the industry standard business credit score used by bankers and lenders to make approval and funding decisions.

D&B PAYDEX

Dun and Bradstreet is a great place for entrepreneurs and new businesses to start if they have little to no business credit. Their PAYDEX score paints a picture of your payment history to vendors and suppliers. A high payment performance lets lenders and bankers know that your business has a strong history of on-time or early payments and are likely to continue that trend.

Experian Intelliscore Plus

The Experian Intelliscore Plus scoring method is well regarded in the credit reporting community. Bankers cashand lenders still rely on this score to determine your business’s repayment probability. It weighs a mix of your business and personal information to deliver a risk/reliability score between 0-100.

The Importance of Business Credit

Knowing your business credit score is just the beginning. Establishing and building robust credit helps your business secure better terms, gets you access to larger loan and credit amounts, and helps you manage cash flow. In other words, strong business credit opens the door for your business to get the capital and equipment you need to prosper and grow.

Click here to learn more about what business credit can do for your business.