Advice for how to understand and improve business credit scores


Why is a business credit score important?

It's important to stay on top of changes to your business credit report to maintain a healthy business credit score.

Your business credit report paints a picture of your small business for others to see. And the business credit score is one of the first things lenders, suppliers, and even some customers look at before deciding to do business with you.

Increasing your score can:
  • Make it easier for you to get loans and lines of credit
  • Improve your credit terms
  • Lower your interest rates and insurance premiums
  • Boost investor interest in your business

However, before you can start improving your business credit score, you have to know what it is — and what's in your company credit profile.

Helpful education and tips for how to improve your company's small business credit score


First, Business credit scores differ from personal credit scores

Many small business owners don't realize that business credit scores are distinctly separate from personal credit scores. Your business credit score has no impact on your personal credit score, and vice versa.

A business credit report shows the same types of information as a personal credit report, but it is specific to a business's debt repayment and public records, such as bankruptcies or tax liens.

The objective of the Experian Business Credit Score (Intelliscore PlusSM) is to predict seriously derogatory payment behavior. Business credit reflects your company's image to potential lenders and business partners. Yet, unlike personal credit — which can be viewed only with the permission of the report holder — business credit scores are made available to the public. Anyone can view your business credit score for any reason.

Furthermore, business credit is expressed with a different numerical range than personal credit. Business credit scores provide a quick view of a company's risk potential based on a scale of 1 to 100 — the higher the score, the lower the risk.


Business Credit Score RangeRisk ClassRisk Description
76-1001Low
51-752Low to Medium
26-503Medium
11-254Medium to High
1-105High


Then, Understand the main factors that influence a business credit score

Credit reporting agencies such as Experian collect credit data from a wide range of sources. This information is used to create a score that illustrates how your business has historically met its financial obligations, which helps lenders decide whether to take a chance on hiring your company.

There are a number of factors that could influence your business credit score either positively or negatively. Those main factors include, but are not limited to:

  • The number of trade experiences, total balances outstanding, payments habits, credit utilization and trends over time.
  • The presence of derogatory public records on the business profile, such as collections, liens, judgments, and bankruptcies.
  • The status, recentness, frequency, and dollar amounts of any applicable liens, judgments or bankruptcies
  • An increased trend in slow payment of obligations.
  • An increase in the number of business credit inquiries or applications that are generated by the business or owner.
  • Years in business, line of business, size of business, and other demographic data.

To learn more about what can impact a business credit score, try Experian's business score planner at www.SmartBusinessReports.com/ScorePlanner


Additionally, Small business accounts paid on time can improve your business credit score

Paying off financial obligations according to the agreed-upon terms is the first and most important step in establishing a good business credit score. All business accounts — not just loans, but also recurring expenses like utilities and leases — should be established in the company's name, and business owners should also ensure that their business vendors report their payment history to a business credit agency.

When a small business lender reports payment history to Experian, it can help improve a business credit profile and increase business credit. The reported information can either help establish a new profile or strengthen an existing one by providing additional trade activity. If a business pays that loan on time, it can further strengthen their business credit profile by showing that the business is managing its — payment obligations responsibly — and thereby positioning itself as a better credit risk for future lenders.


Finally, Be proactive by staying on top of business credit changes

We recommend that small businesses regularly monitor their business credit score for risk changes, and proactively manage it to maintain the lowest risk potential. Managing the factors that drive your score can make a positive impact. This can lead to more opportunities to grow your business, ranging from gaining capital to gaining clients.

Take good care of your small business name and reputation. Update and correct information as your business grows. Small business owners can do so easily using convenient buttons at the bottom of the report

When you take the time to build and maintain business credit history, you'll be building your business reputation and ability to succeed.


Get your business credit score

Information gathering and your business credit score


We collect three types of information regarding your business:

  • Credit obligation information from your suppliers and lenders
  • Legal filings from local, county and state courts
  • Company background information from independent sources, including state filing offices, public records, credit card companies, collection agencies, corporate financial information and marketing databases
This information is combined with data from other sources, including actual trade payment experiences submitted by payees, public record information, collections information, company background and comparative data that places a company's payment performance in context within its industry.

Your Experian business credit score is then calculated by a statistically derived algorithm, designed to determine risk based on multiple factors:

  • Credit: Number of trade experiences, balances outstanding, payment habits, credit utilization and trends over time
  • Public Records: Recency, frequency and dollar amounts associated with liens, judgments or bankruptcies
  • Demographic Information: Years on file, Standard Industrial Classification (SIC) code and business size

Interactive score planner


Guesswork is no way to understand your business credit score.

Educate yourself on the impact certain business credit behaviors have on your score with our learning tool called Business Score Planner.

Use the Business Credit Score Planner tool to:

  • Learn how changes in your credit information influence your potential score
  • Test out theories by seeing how your potential score might change
  • View possible scenarios to find out how they can positively or negatively sway your score
The tool provides projected scores based on common scenarios that may impact your business credit score the most. Learn what these are and use the easy-to-navigate interactive levers for score change estimates.

Best of all, this tool sits side-by-side with your actual credit score on your Business Credit AdvantageSM report.    Sign-up for Business Credit Advantage today and give it a try.   Or, try our standalone interactive score planner at www.SmartBusinessReports.com/ScorePlanner