Featured Expert
Pam Ogden
Pam Ogden President & Founder, Business Credit Reports View bio

This guide was written by

Jennifer DeMeritt

Knowledge is power, especially where your business credit report is concerned. A good credit score can lead to lower interest rates and flexible payment terms with suppliers — but a negative one can wreak havoc on your cash flow and profitability. Read on to learn about business credit reports (which are compiled, calculated and regulated differently from personal credit reports) and how to make yours look as good as it can.

Business Credit Report Breakdown

The three major credit-reporting bureaus — Dun & Bradstreet, Experian, and Equifax — collect information about how promptly your company pays its bills, plus lots of other financial data, and compiles it all in a credit report. Banks and other lenders check your business credit report before offering credit to your company, so it's essential to understand what your report says and make sure it's correct. Each bureau organizes its credit reports differently, but they all focus on the same types of information. Here's what to look for:

  • Credit score

    This numerical rating gives a quick snapshot of the creditworthiness of your company. Each bureau has its own proprietary formula for calculating this score.

  • Company information

    The report lists basic information on your company, such as its name, address and phone number. The type of business (corporation, LLC, etc.), parent company and subsidiaries may also be included.

  • SIC or NAICS industry code

    A company in a high-risk industry, such as a restaurant or real estate firm, may be less likely to get credit on favorable terms than one in a low-risk industry.

  • Company age

    The longer a company has been in existence, the more stable it is perceived to be.

  • Payment history

    This shows how many of your company's payments are made on time or late - and how late. Payment trends over time can indicate whether your company is growing and prospering or heading toward trouble.

  • UCC filings

    Any loan secured by collateral must be reported under the Uniform Commercial Code, preventing the same collateral from being used for another loan. Any liens against your company's property or assets will be listed. Some lenders neglect to update the UCC filing after a loan is paid off, so make sure this section is up to date. Otherwise, your business could look more financially overextended than it really is.

  • Legal issues

    Any lawsuits or court judgments against your company will be noted.

  • Collections

    Has another company initiated collections proceedings against yours? It could make your company look unreliable to potential lenders or business partners. If your business has become more solvent since going to collections, be sure to make all payments on time to repair your credit history.

  • Bankruptcy

    If you've had a bankruptcy in the last three years, it will be difficult for your business to obtain financing. One tactic for rebuilding your business's credit history is to get a retail credit card from a national chain, such as OfficeMax, and pay it promptly.

What Is a Business Credit Score?

Just about everyone knows their personal credit score and what it means. Your business credit score is a bit more complicated. While the personal credit rating agencies use the same scale (300 to 850, with anything higher than 700 being a great credit score), each of the business credit bureaus has its own scale. These are based on different types of information and calculated according to each bureau's own proprietary algorithm. Here's a quick breakdown:

Dun & Bradstreet PAYDEX Score (1 to 100):

This shows whether your company has paid its bills on time over the past 24 months. A higher score indicates a better track record of payment and a lower risk to creditors.

Score Range Risk Class Risk Description
80-100 1 Low Risk
50-79 2 Medium Risk
0-49 3 High Risk
Experian Intelliscore Plus (1 to 100):

This "blended" score incorporates data from your business and personal credit histories to evaluate the chances that your company will become delinquent in the next 12 months. The Experian score reflects information from public records, collection agencies, legal filings, your company's payment history and how it compares to others in the industry. Higher scores indicate a better outlook:

Score Range Risk Class Risk Description
76-100 1 Low Risk
51-75 2 Low to Medium Risk
26-50 3 Medium Risk
11-25 4 High to Medium Risk
1-10 5 High Risk

Equifax takes into account your company's payment history, public records, and business demographics, as well as the small business owner's personal credit, in order to arrive at three separate scores:

  • Payment Index (0 to 100): Reflects your company's payment history to previous creditors. A score of 90 or higher indicates that your company has generally paid its bills on time.

  • Credit Risk Score (101 to 992): Indicates the likelihood that your company will become delinquent in the next 12 months, with a higher score meaning a lower risk to creditors.

  • Business Failure Score (1,000 to 1,880): Evaluates the risk that your company will go out of business in the next 12 months, with higher scores indicating lower risk.

How to Look Up Other Businesses' and Vendors' Credit Scores

Checking another company's credit report lets you know whether doing business together is a good risk. If your supplier pays its own suppliers late, that could mean a delay for your shipment. But if you were to check its credit report before committing, you could spot that late payment history, then look for another vendor that's more reliable. The same goes for companies you sell to — you want to be sure they'll pay on time and stay in business so you can keep selling to them.

Knowing your clients' credit history is critical if you manage cash flow with accounts receivable financing. Since your clients' invoices are collateral for a loan to your business, the lender will check your clients' credit histories to determine your interest rate. By checking your client's credit histories first, you can keep bad apples out of the ledger of invoices you're borrowing against — and keep interest payments affordable.

D&B, Experian and Equifax make it easy to check another company's credit report. It's as simple as going to the bureaus' websites and paying the fees. Options include a single report on a single company, a batch of reports on multiple companies and long-term monitoring of targeted companies.

You can check your own company's credit report the same way, or sign up for a monitoring service that alerts you when your credit score changes or is checked by someone else.

How Your Business Credit Score Affects Financing

Just as you can look up another company's credit report, any other company — whether it's a bank, insurer, vendor or potential client — can check yours. They will want to know whether your company is solvent, stable and reliable before doing business with you. This means that the information in your credit report, whether good or bad, can have a major impact on financing and many other aspects of your business. Here's how:

Interest rates on loans and credit

It's no surprise that banks are the biggest users of business credit reports. An excellent business credit score can mean a low interest rate on a bank loan or credit card, as well as a higher credit limit. If your credit score isn't high enough to meet banks' rigorous standards, there are plenty of alternative commercial lenders, but they tend to charge higher interest rates.


A past bankruptcy can make your company look risky, leading to higher rates for general liability insurance. And in the eyes of an insurer, if your company misses other monthly payments, it might miss insurance payments as well. Finally, statistics show that fewer insurance claims are filed by people with good credit. All this adds up to lower insurance premiums for a company with a good credit history.

Better terms from suppliers

Suppliers are often willing to accept payment on a 30-day or 60-day term, but they need to trust that you'll pay them back on time. A good credit report can help you get favorable payment terms, while a negative payment history could cause suppliers to decline your business or demand cash on delivery.

Equipment leasing

Many companies need financing for heavy equipment that's too expensive to purchase upfront. If your business has a good credit score, the interest rate on an equipment lease will be much lower. The payment term may also be longer, leading to monthly payments that are even more affordable.

Protection for your personal credit

Your business credit score isn't harmed by inquiries, but your personal credit score is. If your business credit report shows a long track record of on-time payments and overall financial stability, lenders and suppliers are more likely to offer your company credit without checking your personal credit.

Protection against personal liability

A company with good credit is less likely to need a personal guarantee in order to get business financing. In other words, you won't need to use your house or car as collateral.

Attracting investors

Investors can fuel the growth of your company, but they need to know that it's a good bet. An established business with healthy finances, ample available credit and good relationships with creditors can make for an attractive investment.

Improving cash flow

A good credit report means lower interest rates across the board for any type of financing your business might need. Businesses also tend to receive lower interest rates and more favorable lines of credit than individuals. All this adds up to healthy cash flow for your business.

How to Build Business Credit

Business credit needs to be built methodically and managed carefully. As your company is getting off the ground, follow these steps to build a positive credit history.

Establish your business as a separate legal entity.

This allows your business to build a credit history that's independent of your personal credit history. Setting it up as a corporation or LLC also will protect your personal assets from business debts or liability. A partnership or sole proprietorship won't offer the same protection but will still achieve the goal of establishing a separate identity for the business. No matter what type you choose, be sure to meet all local, state and federal regulations.

Get a Tax Identification Number from the IRS.

Just as your social security number is linked with virtually all of your financial records (loan, lease and job applications, to name a few), a tax ID number or TIN (also called an Employer Identification Number or EIN) will be linked to all of your business's financial information. Think of it as the legal and financial fingerprint for your company.

Get a DUNS number from Dun & Bradstreet.

The best way to start a credit file for your company is to proactively establish one by becoming listed on the Dun & Bradstreet database. D&B (unlike Experian) will open a credit file for your business upon request. As part of the process, it will issue a nine-digit Data Universal Number System (DUNS) number, which is the most widely used number in the U.S. for identifying companies. Lenders will reference this number when looking for information about your business.

Open a business checking account.

Using your new EIN and DUNS numbers, open a checking account in your business's name. Use this account (NOT your personal account) for routine business expenses such as rent, utilities, and supplies.

Get a business credit card.

Make sure the card is in your business's name and is linked to its EIN and DUNS numbers. Applying at a bank where you already have a personal account in good standing can make it easier to get approved. Use the card strategically to start building a positive credit history. Just make sure to pay it on time (with funds from your new business checking account). And a good rule of thumb is not to use more than 25 percent of the credit available, as such use affects your business credit score.

Buy from suppliers on credit.

Ask if they will report your company's positive payment history to the business credit bureaus. If they won't, look for vendors who will. This positive payment history will become an important part of your credit report and lead to a higher credit score.

Manage your business finances carefully.

Pay your bills on time — or early, if possible, which will lead to a higher credit score. Since your business credit report includes more than payment history, be conscientious about all aspects of your business finances, including tax payments and filings.

Check your credit reports — all of them.

Since D&B, Experian and Equifax aren't required to share information with each other, and since many vendors only report trade payment data to one bureau, it's a good idea to check all three, especially as a new business. If there are errors, the burden of proof is on your business, not the credit bureaus, for correcting them. Going forward, check them once a year.

Expert Q&A

expert Pam Ogden Author

Pam Ogden is the president and founder of Business Credit Reports, which is licensed by Dun & Bradstreet, Experian, and Equifax to provide business credit reports that combine information from all three bureaus.

How is the trade payment information that goes into a credit report collected?

There are thousands of manufacturers and wholesalers and other business-service companies that report to the credit bureaus about how their customers are paying them. But usually, a company only turns trade payment data over to one credit bureau, not all three. This is unlike consumer credit, where all major credit card companies report to all three consumer bureaus.

What impact does this have on businesses?

It really hurts the small business trying to get a loan, a lease or a line of credit, and get it on preferred terms. The problem is that one credit bureau might have so little information that the business doesn't get preferred terms, even if it pays its bills on time and is a good risk. That's why you need [credit reports from] all three bureaus for a small business. If there are only one or two vendors reporting to one bureau, two others reporting to another bureau and three to a third bureau, when those credit reports are combined, all of a sudden this small business looks great. But if there's only one trade line from Dun & Bradstreet, the business doesn't look good.

Do all suppliers and wholesalers report trade payment information?

Some companies don't do it, and they're hurting the 90 percent of customers that pay on time and could get a positive trade line on their credit reports. We tell companies to look at the synergy of reporting positive trade information on their good, paying customers. It helps them get the credit they need at the lower interest rates they need so that they can grow their businesses and buy more from their suppliers. It's a great synergy.

How can a small business persuade its vendors to report?

If you're looking at multiple vendors, ask them, "Do you report to the business credit bureaus? If you don't, I'm going to buy from another vendor that does." That would help make everyone report.

How has technology changed the world of business credit?

Technology has been awesome. It has made it much easier for companies to report. It used to be that only the huge companies could report, and it was a huge undertaking. Now, if you can output trade payment information about your customers into an Excel spreadsheet, you can report. It's that simple.


Dun & Bradstreet

D&B is one of the three major business credit-reporting bureaus. Visit its website to check your own credit report, look up other companies and read expert advice for business owners.


Business and consumer credit bureau. Use the website to check your own credit report and find resources for your business.


Business and consumer credit bureau. Visit the website to check your own credit report, look up other companies and read expert advice for business owners.

Business Credit Facts

Hosted by Experian, this website offers expert advice for business owners about credit, financing, taxes and other matters.

U.S. Small Business Administration

This site offers resources for small business owners, including information on how to build and manage business credit.

National Association of Credit Management

NACM is a trade association for business credit and financial management professionals.


Formerly Creditera, Nav offers credit-monitoring services to business owners.

Business Credit Reports

Licensed by Dun & Bradstreet, Equifax and Experian provide business credit reports that incorporate information from all three bureaus.