How to Check Your Business Credit Score: A Comprehensive Guide for SMBs

A business’s credit score is a vital component of your ability to manage the business’s finances. If the score is good, it significantly improves the ability of your business to access credit when you need it on reasonable terms. In this article, we’ll cover exactly what a business credit score is and how you can check your business’s score.

To learn how to build a strong business credit score, check out this article.

What is a business credit score?

A business credit score is similar to an individual’s credit score in that it represents an estimation by a credit rating agency of the business’s ability to meet its debt payment obligations. As with individual ratings, the credit score takes the form of a number. For instance, the Dun & Bradstreet  PAYDEX business credit score rating system ranges from 1 to 100, with 100 the highest score possible and 1 the lowest. A high score indicates that a business is seen as being very likely to remain current on its debts.

Business credit scores also differ from personal scores in that additional criteria are taken into account. Along with a business’s payment history, credit usage, and account age, business credit rating bureaus look at factors such as company size, the industry a company operates in and trade credit lines. 

Why are business credit scores important?

Maintaining a good business credit score offers a number of advantages:

• Better terms on credit, including both lower rates and longer repayment periods.
• The ability to borrow larger amounts when needed.
• Businesses with good credit scores typically pay less on insurance premiums for business insurance.
• It makes it easier to get credit for your business without signing a personal guarantee that makes you liable for any debts the business can’t repay. 
• Since business credit scores are not private, a good score can help when you’re trying to appeal to investors, insurance companies, and companies you’d like to partner with.
• Suppliers are likely to offer better terms on trade credit.

Additionally, businesses with high credit ratings are likely to have more success in forming partnerships with other companies, whether to jointly market products or collaborate on strategic initiatives, as potential partners are likely to look more favorably on firms with a successful record of meeting their financial obligations.

Key factors influencing your business credit score

A variety of factors are used by rating agencies to determine your company’s credit score, including:

How to check your business credit score

1. Establish your business

Your business must be officially registered in order to receive a credit score. To do this, you first determine the type of business registration you prefer (corporation, LLC, sole proprietorship, etc.) and then file a registration form with the applicable government bodies. This process typically includes filing for an EIN (employer identification number) with the IRS. 

There is no charge for acquiring an EIN, which is similar to a Social Security Number as a tax identifier but for businesses rather than individuals. Establishing your business in this manner keeps your personal and business identities separate, which, as explained in this article, can pay dividends by simplifying your tax situation and protecting your personal assets, among other benefits. 

2. Open business accounts

Opening accounts in the name of your business can help establish a credit history for the business separate from your personal credit rating. The first step in this process is often to open a business bank account using the legal name of your business. 

Registering with Dun & Bradstreet for a DUNS number is another step you can take to further establish your business. This nine-digit number is free for any business and serves to identify each physical location associated with your business. A DUNS number or EIN is used by credit rating bureaus to identify payment activity linked to your business as it is reported, and this data is fed into business credit scoring systems.

3. Collaborate with credit reporting companies

When choosing where you do business, it’s important to work with companies that report credit transactions to credit bureaus. Business credit cards are helpful in building a business credit score, as are credit accounts offered by various stores. 

Try to make payments early if possible, as the Dun & Bradstreet PAYDEX business credit score gives the highest ratings to businesses who do so.

4. Regularly monitor your business credit

When running a business, it’s important to have access to credit for two reasons:

• To deal with any emergencies that may arise
• To help achieve strategic objectives. 

Monitoring your business credit on a regular basis is a good idea. This enables you to deal with any errors, fraudulent activity or legitimate negative marks that may appear on your business’s credit report, either by disputing them with the credit rating bureau or taking steps to pay them off. 

Curious how to check your business credit score?  There are a variety of services, both free and paid, to choose from:

• Dun & Bradstreet
• Experian
• Equifax

Leverage your business credit for success with Aion

A good business credit score can be a tremendous asset for companies by providing them the financial flexibility they need to achieve their strategic objectives. There are many specific benefits to maintaining a good business credit score, including the ability to borrow at lower interest rates and acquire reasonably priced business insurance. 

Aion is here to help businesses maintain their good credit rating and access capital when they need it. Our bill pay service makes it easy to ensure bills are paid on time. And our non-dilutive financing options enable businesses to raise needed capital without giving up equity.