What is a Business Credit Score?

What is a Business Credit Score?

A business credit score provides potential lenders with a rating on your company’s overall credit, including factors such as payment history, current credit utilization and company size. These scores work similarly to your personal credit score, with that being said, we will discuss a few key differences below. Just as you want a good personal credit score to borrow funds, the same can be said for you and your company.

How a Business Credit Score Works

There are a few significant differences between your personal credit score and a business credit score. Simultaneously, a personal credit score ranges from 300 to 850, a business credit score spans from 0 to 100. Credit bureaus do not have a standardized set of rules that they must adhere to when calculating credit scores for businesses. As a result, your scores could vary from bureau to bureau.

Also, while consumers are entitled to one free credit report every 12 months, you must pay for your business credit score every time. They are also public records, so you can view any business’s score at any time.

The Benefits of a Strong Credit Score

Lenders will evaluate your business credit score when deciding to approve a loan. A high score will make it easier to obtain financing, help you achieve lower rates and help you be approved for larger amounts. Some lenders will also evaluate your personal credit score – especially if the loan is for a small business – but a business credit score can provide additional information on your company’s financial strength.

Improving Your Company’s Credit Score

Similarly, to a personal credit score, credit bureaus consider payment history and the length of time you have had credit accounts. The best way to build a solid credit score is to make payments on time, every time. The amount of outstanding debt, liens or bankruptcies from your past are other factors that may impact your overall score.

Business credit reports can have wrong or missing data on them. If you don’t know your business credit score, you should consider getting a report. That will allow you to dispute any erroneous data that may bring your score down. You also want to look for any information that appears fraudulent, such as accounts you didn’t open.

You may also want to provide updated information about your company to the bureaus, such as the number of employees you have and revenue growth, to help build your score. Some bureaus consider your business’s long-term value when creating your score and your long-term ability to repay any loans.

Hire Alacrity Collections to Deal with Your Overdue Accounts Receivable

Alacrity Collections is proud to be a leader in debt collections since 1982. Chasing overdue invoices is not an effective use of your time. Let our team help so you can work on running and growing your company. We achieve great results that are over twice the national average and treat all of our customers with dignity and respect. We work tirelessly to protect your brand and improve your net returns. To learn more about our services and get in touch, please call us at 1-800-752-9663 or email us at info@accmd.com.

Sign Up for News & Updates from Alacrity

You might also enjoy

A Deep Dive into Skip Tracing

According to the United States Postal Service, nearly 30% of “undeliverable-as-addressed” mail comes from people who have moved and failed to forward their mail or update their new address. Though

Read More

Sign up

Join our newsletter for updates about the collections industry, Alacrity news, and tips to improve your collection rates…

Alacrity Collections
Skip to content