Business credit scores explained

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In a Nutshell

Understanding the difference between a personal credit score and a business credit score is an important one for any small business owner. Here's a simple primer that can help anyone quickly distinguish between the two types of credit scoring and discern what actually matters.

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What makes your business worthy of being approved for a loan or paying a vendor on terms?

The answer could depend on any number of things — your business’s cash flow, reputation, even your personal relationship with the other party. Another important factor could be your business’s credit score. Or, to be more precise, your business credit scores.

That’s right. Your business may have several different credit scores.

Most business credit scores are calculated using similar factors, such as the type of business you run and whether you make on-time or early payments. So if you focus on just a few general ways to build your business credit, your hard work could improve your business’s credit health.

Why care? Just like with personal credit, business credit can help financial institutions, vendors, insurance companies and others evaluate the risks of working with you.

Business credit may be important even if you never take out a loan.

Maybe you don’t ever plan on taking out a loan. That’s fine, but knowing that your business’s credit could help you secure one in a pinch may be reason enough to establish and build your business credit. A good score could also lead to better terms with vendors and lower business insurance premiums.

Read on to get a better understanding of the scores the four major business credit bureaus provide, how they’re used and what they may tell your lenders. The four major business credit bureaus are:

  • Dun and Bradstreet®
  • Experian®
  • Equifax®
  • FICO®

Dun and Bradstreet business credit scores

Dun and Bradstreet (D&B) is a public corporation that has a commercial database of over 265 million business records. Unlike with some other credit bureaus, such as Experian, you can self-report your business’s financial statements and trade references to D&B, and that information could then impact your D&B scores. To start building your credit with D&B, request a free D-U-N-S® Number. This is a nine-digit number used to identify each physical location of your business.

D&B offers several different scores and ratings that can be used to assess your business’s credibility. Here are several you should be aware of:

Delinquency Predictor Score

The Delinquency Predictor Score (DPS) estimates the chance your business will ask for legal relief from creditors, shut down without satisfying its debts in the next 12 months, or show other signs of “severe delinquency.”

Your DPS can range from 101 to 670. D&B also assigns your business a Delinquency Predictor Risk Class (1 to 5) and Delinquency Predictor Percentile (1 to 100). A higher DPS or percentile indicates a lower likelihood that your business will have a severe delinquency. On the flip side, you want to be in a low risk class — 1 indicates the lowest probability of your business failing to pay back debt over the next year.

Financial Stress Score

Based on industry statistics, your business’s history and payment habits, the Financial Stress Score (FSS) predicts the chance your business will experience financial stress within the next 12 months.

Your FSS can range from 1,001 to 1,875, and D&B gives your business a Financial Stress Class (1 to 5) and Financial Stress Percentile (1 to 100). As with the DPS, a higher score or percentile is best while a lower stress class indicates lower risk.

Supplier Evaluation Risk Rating

Your business’s Supplier Evaluation Risk (SER) Rating could be important if you’re a supplier for other businesses. This score ranges from 1 to 9 and predicts the likelihood that your business will close within the next 12 months. A lower score indicates a lower chance of closure.

PAYDEX® score

This is the big one — and it’s also pretty straightforward. Your business’s PAYDEX® score ranges from 1 to 100 and indicates the risk your business won’t pay its bills on time. A higher score is better, as it indicates a lower chance of a late payment.

Your business’s PAYDEX® score depends on your payment history with accounts that report to D&B. Heads up: The scoring model is dollar-weighted, so larger accounts could have a bigger impact on your score.

Making on-time payments can get you a score of up to 80. To get closer to 100, you’ll have to be an early bird and pay an average of 30 days before your terms require. Think of it as a reward for good behavior.

Experian business credit score

Experian’s latest business credit score, Intelliscore PlusSM, uses over 800 data elements of data to give your business a percentile risk score of 1 to 100. A higher score is better, as it means your business is less likely to go bankrupt or be over 90 days late with a payment within the next 12 months.

But wait a second… what about those 800 data elements? These come from a variety of commercial and consumer sources rather than information you report about your business. Experian gathers data from public records, such as bankruptcy filings and information about when your business was established and what it does. The scoring model also uses payment data, such as your record of on-time payments with a business credit card.

In addition, Intelliscore PlusSM may use blended data, which is combined business owner credit data from up to four business owners and company credit data, meaning your personal credit could also impact your business credit score.

Equifax business scores

Equifax’s business credit scores use information from public records and the Small Business Financial Exchange™ (SBFE), which has records of your business’s payments to credit card issuers, banks, vendors and other creditors.

Payment Index

Equifax’s business credit reports may also have a Payment Index, which indicates the likelihood that your business will make payments on time. The Payment Index ranges from 1 to 100, with a higher number indicating you’re more likely to pay on time.

Delinquency and failure scores

Payment Index aside, Equifax has several versions of its delinquency and failure scores. These scores, such as the Business Delinquency Score™ and Business Failure Score™, predict the likelihood that your business will either not pay its bills or go bankrupt within the next 12 months. While the score ranges vary, generally a higher score is better, as it indicates a lower chance your business will fall behind or fail.

The business credit scores may also be accompanied or replaced by a business risk class. Ranging from 1 to 5, these provide a less-detailed view of the risk associated with a particular business. A lower score indicates less risk and is therefore better for your business.

FICO® business credit scores

The FICO® Small Business Scoring ServiceSM (SBSSSM) solution can draw on data from business credit bureaus and your application to determine your business credit score. It also may incorporates data from the principal’s consumer credit reports, meaning your personal credit could influence your FICO business credit score.

The FICO® SBSSSM solution may be a particularly important one, as the Small Business Administration (SBA) credit scoring tool uses it to expedite credit decisions when considering applicants for certain 7(a) loans. FICO’s small business credit scores range from 0 to 300, with a higher number indicating your business is more likely to make its payments on time.

Checking your business credit reports and scores

Unlike with personal credit reports, the business credit bureaus aren’t required by law to give you free access to your business credit reports. The good news? You may still be able to find free copies of your reports via companies such as Nav, (and if all else fails, you can buy your scores from the business credit bureaus or some third-party score providers).

We recommend occasionally reviewing your business credit reports and filing a dispute if you find any errors.

Bottom line

Companies and individuals use business credit scores for all kinds of reasons. Learning how to establish and build your business credit can save you money and give you access to more — and less expensive — financing. Knowing about the different scores and the factors that influence them is a good place to start.


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