What is a Good Business Credit Score?

Dun & Bradstreet uses a PAYDEX® Score to assign a numerical value between 1 and 100 that reflects a business’s past payment performance. They break down scores into three risk categories:

Companies may improve their PAYDEX score by ensuring payments are made on time or in advance and that suppliers report those timely payments to Dun & Bradstreet.

In addition to the PAYDEX score, Dun & Bradstreet also use two separate indicators that predict delinquency and business failure.

The D&B Delinquency Predictor Score (DPS) is a scale of one to five that estimates how likely a business is to make late payments, fail to make payments, or go into bankruptcy. A DPS score of one represents a low risk, while a score of five is considered extremely risky and indicates a high likelihood of delinquency.

The D&B Failure Score evaluates the potential stress of a business’s financials and the likelihood of an adverse financial event in the next 12 months. Like the DPS, the Failure Score also uses a one to five rating system where a lower score represents a lower risk of failure.*

Experian Business uses its patented Intelliscore Plus system to calculate business credit scores, using a 1 to 100 range. A score closer to zero signals a higher risk for a vendor or lender, while a score closer to 100 signals less risk. A score over 75 is considered excellent.**

Equifax Business has a more complex scoring mechanism where vendors can access unique scores in the following four areas:

• Credit Information: The Credit Information measure assesses a company’s payment history to tell an inquirer the likelihood that they’ll get paid. Scores range from 20 to 70, with a lower score indicating positive attributes and signaling lower risk. A score of 20 suggests no credit information, while a score of 70 indicates that the company has filed for bankruptcy.
• Payment Index (PI): The Payment Index ranges from 0 to 99 and reflects the company's payment habits for any amounts owed in the preceding 90 days. A score of 0 indicates timely payments to all creditors, while a higher score shows that the company is taking longer to pay creditors.
• Commercial Delinquency Score (CDS): The CDS predicts the likelihood that a business will fall into severe delinquency or bankruptcy in the next 12 months. The score ranges from 101 to 662, and higher scores signal lower risk.
• Business Failure Risk Score (BFRS): The BFRS predicts the odds that a business will shut down entirely over the next 12 months. The score ranges from 1001 to 1722, with higher scores indicating a lower likelihood of business failure. ***

Potential creditors and vendors can use a combination of these scores to get a holistic picture of a business’s creditworthiness.

FICO’s SBSS business credit score ranges from 0 to 300, with higher scores signaling a lower risk to potential lenders.+ The FICO SBSS is used by the Small Business Administration (SBA), so it’s important to check this score before applying for any SBA loan. For example, the current minimum credit score to qualify for an SBA 7(a) loan is 155.++

What credit score does a new business start with?

New businesses typically start with no business credit score as they lack a credit history. To build a credit score, a business needs to establish credit by opening accounts with vendors or lenders that report to business credit bureaus. As the business begins to build a payment history with these creditors, it will gradually develop a business credit score. This process can take several months to a year, depending on how actively the business manages its credit and how frequently its credit activities are reported.

Does my personal credit score affect my business credit score?

Yes, your personal credit score can impact your business credit score, especially for new or small businesses. Lenders and credit bureaus often consider the personal credit history of business owners when assessing the creditworthiness of a business, particularly if the business has limited or no credit history of its own. This is especially relevant for sole proprietorships and small businesses where the personal and business finances are closely intertwined. As such, maintaining a strong personal credit score can help support the business’s credit profile.

What steps can I take to improve my business credit score quickly?

There are no short cuts when it comes to building business credit scores, though you can adopt healthy financial habits to improve your business credit score over time. Start by paying all business bills and debts on time to develop a positive payment history. Obtain and use a business credit card or a small loan responsibly, ensuring that you pay off the balance in full each month. Regularly monitor your business credit reports for any inaccuracies and promptly dispute any errors. Establish trade credit by working with suppliers and vendors that report to business credit bureaus and make timely payments to these partners. Finally, consider requesting higher credit limits as your credit improves to lower your credit utilization ratio, which can positively affect your score.