Understanding business credit scores

Business credit scores are an important aspect of your company’s financial health. They can impact everything from investor relationships to insurance costs and eligibility for funding. There are several ways you can establish and influence your company’s credit score, such as by using a business credit card responsibly and paying all your bills on time. Learn more about how to increase your company’s credit score to support its success and growth. 

Key takeaways

• A business credit score is a number typically between 1 and 100 that reflects your business’s creditworthiness. 
• When you apply for credit, lenders may review your business credit score to help evaluate your likelihood of borrowing and repaying funds responsibly.
• Business credit scores can influence your eligibility for funding, insurance premium costs and more.

A business credit score is a measure of your business’s credit risk. Business credit scores are usually between 1 and 100, while personal credit scores range from 0 to 850. As with personal scores, the higher your business credit score, the better your creditworthiness in the eyes of lenders, investors and other key parties.

Many factors influence your business credit score, including payment history, credit utilization and the size of your company. Understanding the factors that influence your company’s credit score can help you improve its creditworthiness and access associated benefits. 

Each credit bureau has its own scoring system to evaluate a business’s health and creditworthiness. The three main business credit scoring bureaus are Dun & Bradstreet, Equifax® and Experian®. Take a closer look at each.

Dun & Bradstreet calculates many different business credit scores, including: 

• PAYDEX® score: With a range of 1-100, this score indicates a business’s likelihood of making on-time payments. Scores below 50 signal a high risk, scores of 50-79 signal a moderate risk and scores of 80-100 signal a low risk. 
• Failure score: With a range of 1,001-1,875, this score indicates the risk of bankruptcy and business closure within a year. The lower the score, the higher the risk. 
• Delinquency score: With a range of 1-5, this score indicates the risk of bankruptcy and payment deadlines missed by over three months. The lower the score, the lower the risk. 

Equifax provides three key business scores: 

• Payment index: With a range of 0-100, this score indicates a business’s likelihood of making on-time payments. The higher the score, the lower the risk. 
• Credit risk score: With a range of 101-992, this score indicates a high likelihood of delinquent payments. The higher the score, the lower the risk. 
• Business failure score: With a range of 1,000-1,880, this score indicates the likelihood of business failure within a year. The higher the score, the lower the risk. 

Experian leverages the following scores and ratings to pinpoint business creditworthiness and risk:

• Business credit score: With a range of 1-100, this score represents the likelihood of severely late payments. The higher the score, the lower the risk.
• Financial stability risk rating: With a range of 1-5, this score indicates the likelihood of bankruptcy or default within a year. The lower the score, the lower the risk. 

Business credit bureaus calculate your company’s credit score and other ratings based on their own scoring models. As a result, your business’s credit score may differ depending on the company that calculated it and the scoring model used. However, most business credit scoring companies consider the following factors when determining your score:

• Number of trade experiences
• Outstanding account balances
• Payment history and habits
• Credit utilization
• Public records related to liens, judgments or bankruptcies
• Business age and size

By understanding what factors influence your business’s credit score, you can work to build a better credit profile and support your company’s health, financial standing and growth potential.

Different bureaus usually have their own scoring models with unique numerical ranges, so there’s no universal “good” business credit score. For models with ranges of 1-100, scores above 80 typically indicate low risk and a strong history of on-time payments. Refer to the table below for bureau-specific insights: 

Lenders, insurers, investors, vendors, suppliers and others may use a business’s credit scores to gauge how reliable a business may be as a borrower, client or partner. Good business credit scores may help your business obtain:

• Better financing options
• More negotiating power
• Lower insurance premiums
• Favorable contract rates and terms
• Partnerships with other organizations

You can access your business’s credit scores by getting your business credit reports from Experian, Equifax and Dun & Bradstreet:

• Dun & Bradstreet: To request a credit report from Dun & Bradstreet, you’ll need a registered D-U-N-S Number®. You can request a free D-U-N-S Number online. Once registered, you can request a report with your PAYDEX score and other business credit information.
• Equifax: Your Equifax business credit reports include your Equifax Business Payment Trend, Payment Index and Risk scores.
• Experian: Your Experian business credit reports include your Experian Intelliscore Plus business credit score and Financial Stability Risk Rating.

Learn more about business credit scores with these frequently asked questions.

Your business credit scores show lenders and potential partners how you manage money. With healthy scores, your business has an essential tool to help it successfully grow.

It’s never too soon to take charge of your credit scores. Look through Capital One’s business credit cards to start building your credit while accessing other benefits to support your company’s growth.