Many people are familiar with their personal credit scores. After all, that’s what lenders use to gauge your creditworthiness when you want to buy a car, a home, or take out a personal loan. But if you’re a small business owner, you’ll need to keep an eye on both your personal and your business credit scores.

Your business credit score will range between one and 100, or 0 and 300, using the FICO Small Business Scoring Service (FICO SBSS). A higher score can signal to lenders that you’re a less risky borrower, potentially making lenders more willing to provide funding that enables you to seize opportunities to grow your business.

Key Considerations

Business credit scores, which often range from 0 to 100 but vary based on the scoring model, are crucial for securing loans and favorable terms from lenders.
You can improve your business credit score with responsible financial management, like diversifying your credit mix, ensuring timely payments, monitoring credit reports, and checking public records.
A higher business credit score may help a business to secure better financing terms, negotiate favorable vendor contracts, attract investors, and reduce insurance rates.

What is business credit?

Business credit is a measure of how effectively your business manages and repays debt. If you want to take out a small business loan to expand your business operations, consolidate debt, or meet your working capital needs, your business credit score could be one determining factor.

Similar to your personal credit score, your business credit score will vary based on the credit bureau you’re using to check the score. The most popular business credit scoring models are:

Dun & Bradstreet: Dun & Bradstreet uses a PAYDEX® Score which ranges from 0 to 100, with higher scores of 80 and over typically being the most favorable according to lenders.*
Experian: Experian’s business credit score ranges from 0 to 100 and classifies borrowers into low, medium, and high risk categories. Those with a business credit score below 49 are considered high risk, while medium risk borrowers have a score between 50-79, and the lowest-risk borrowers have a score of 80 or above.**
FICO: FICO’s Small Business Scoring Service (SBSS) gives a business a score between 0 and 300.*** A score of over 160 is generally viewed favorably by lenders, specifically the U.S. Small Business Administration (SBA), which uses the FICO SBSS to prescreen businesses that apply for the SBA 7(a) loans above $350,000.⁺
Equifax: Equifax is unique in that it notes three scores on its business credit reports. The business credit score ranges from 101 to 992, and scores of about 550 or higher are generally considered good.⁺⁺

It may cost money to check your credit report and score with each of the bureaus, but it may make sense to do so before you apply for a loan if you’re unsure where your business credit score stands.

How to build business credit

There are several ways to build business credit, though keep in mind that specific factors used to create your score will vary depending on the bureau maintaining your credit file.

Diversify your business’s credit mix

Similar to how credit mix makes up 10% of your personal credit score, your business credit score also considers the types of credit you can manage responsibly. Lenders and credit scoring bureaus may view a combination of installment loans, like small business loans, and revolving debt, like credit cards, more favorably.

Pay off financial products in a timely manner

One of the most important factors in your business credit score is your payment history. A history of timely payments will positively impact your score, while a track record of missing payments signals a higher risk to lenders and can bring down your score.

Responsibly leverage credit

Similar to how you manage your personal credit profile, you’ll want to track your business’ credit utilization, age of credit history, and number of new credit applications. Higher credit utilization, shorter credit history, and a spike in new credit applications may all signal risk and result in a lower business credit score.

Monitor your business credit report’s activity

It’s up to you to monitor your business credit report and ensure all of the information is correct. If you identify an error on your credit report, whether it’s a loan you never applied for or a payment marked as late in error, correcting it could help boost your score quickly.

Check your company’s public records

Some credit bureaus will comb through your company’s public records, if they exist, to check for bankruptcies and other indications of financial struggle. Just like you’ll check your credit report regularly, it also makes sense to see what financial information is available in the public domain.

Why improving your business credit score matters

A higher business credit score can help small business owners to:

Qualify for financing opportunities and more favorable loan terms: Lenders may grant the most highly qualified borrowers the best loan terms and interest rates. And with 52% of firms reporting difficulties paying operating expenses, according to the 2023 Small Business Credit Survey, access to financing is more important than ever.⁺⁺⁺
Negotiate better terms with vendors: Showcasing your propensity for smart financial management may mean you have room to negotiate with vendors to offer you the best contracts and terms.
Get access to funding through raising money from investors: Potential investors may check your business credit score to determine whether your company is worthy of an investment.
Qualify for lower rates for business insurance: Insurers may look to your business credit score to measure the risk of insuring your company. A higher score could mean you’re less of a risk and may qualify for a better rate.

How BHG Financial can help you improve your business credit score

Compared to other lenders, BHG Financial takes a 360-degree view of your finances to qualify you for highly specialized commercial financing up to $500,000^1,2, which you can use to reach your business objectives. With repayment terms of up to 12 years¹, you can use our secured small business loans to buy or lease equipment, expand your operations, buy out a partner, and more. You’ll have access to our dedicated, U.S.-based concierge service around your schedule, which means you can rely on our team to serve your needs every step of the way.

Get started by viewing your personalized estimate using our payment estimator.

Building business credit FAQs

How do I get my business credit score?

You may need to sign up for a credit bureau’s online tools to access your business credit score. Dun & Bradstreet, Experian, and Equifax are the three main bureaus that determine business credit scores.

Is it better to build personal credit or business credit?

While maintaining a solid personal credit score is important, it may be easier to build business credit since it considers fewer factors. You’ll want to maintain both your personal and business credit scores since some lenders will consider both when making a lending decision.

* “Business Credit Scores & Ratings.” Dun & Bradstreet, https://www.dnb.com/resources/db-credit-scores-ratings.html. Accessed June 19, 2024

** “What Is a Good Business Credit Score?.” Experian, https://www.experian.com/blogs/small-business-matters/2021/08/12/good-business-credit-score/. Accessed June 19, 2024

*** “What Small Business Owners Need to Know About Credit.” myFICO, https://www.myfico.com/credit-education/blog/personal-credit-impact-business-financing. Accessed June 19, 2024

⁺ “How to Find Your Small Business Credit Score.” CO by U.S. Chamber of Commerce, https://www.uschamber.com/co/start/strategy/small-business-credit-score. Accessed June 19, 2024

⁺⁺ “Equifax business credit report: What to know.” Bankrate, https://www.bankrate.com/loans/small-business/equifax-business-credit-report/. Accessed June 19, 2024

⁺⁺⁺ “2024 Report on Employer Firms: Findings from the 2023 Small Business Credit Survey.” FED Small Business, https://www.fedsmallbusiness.org/reports/survey/2024/2024-report-on-employer-firms. Accessed June 19, 2024

Not all solutions, loan amounts, rates or terms are available in all states.

¹ Terms subject to credit approval upon completion of an application. Loan sizes, interest rates, and loan terms vary based on the applicant's credit profile.

² BHG Financial business loans typically range from $20,000 to $250,000; however, well-qualified borrowers may be eligible for business loans up to $500,000.

Business Loan Repayment Example: A $94,695 commercial loan with a 9-year term and an APR of 14.8% would require monthly payments of $1,591.

No application fees, commitment, or impact on personal credit to estimate your payment.

For California Residents: BHG Financial loans made or arranged pursuant to a California Financing Law license - Number 603G493.

IMPORTANT INFORMATION ABOUT ESTABLISHING A NEW CUSTOMER RELATIONSHIP
To help the government fight the funding of terrorism and money laundering activities, Federal law requires all financial institutions to obtain, verify and record information that identifies every customer. What this means for you: When you apply for a loan, we will ask for your name, address, date of birth, social security number and other information that will allow us to identify you. We may also ask to see your driver's license or other identifying documents. If all required documentation is not provided, we may be unable to establish a customer relationship with you.