Small Business Credit Report
I’m sure you have a habit of checking your personal credit scores, credit reports and credit card statements on a regular basis but how much attention do you pay to your small business credit report?
While there are several business credit bureaus that collect data let’s stick with the three main ones. Keep in mind that each file you have listed is going be different with each bureau so it’s important that you monitor your files on a regular basis.
Dun & Bradstreet Business Credit Report
This report also known as the Business Information Report or BIR is an overall profile that suppliers and lenders will use to evaluate your company and tends to be the most popular D&B report that creditors pull. The report is pretty extensive because it includes your company’s financial information, history & operations, payment history and details.
Keep in mind that the details of your company like financials are supplied by you when you set up your file so be sure to keep this information updated through eupdate so it matches the numbers you provide on credit applications. Any inconsistencies can cause your company to get declined.
Two things you should pay special attention to is the paydex score and credit limit recommendation listed in your report. A 75 or greater Dun & Bradstreet credit rating is considered a good risk but what carries more weight is the credit limit recommendation.
The conservative credit limit is for companies that prefer to minimize risk as much as possible and the aggressive limit is for creditors that will accept more risk.
Experian Business Credit Report
This report also known as the CreditScore Business Report includes you’re company’s business and credit information. It’s considered Experian’s most popular report used by creditors and specifically you want to pay attention to your business credit score.
A score of 90 or greater is excellent and it’s based on your company’s industry risk, number of trades, length of history and your debt to credit limit ratios. As I mentioned on previous posts you want to avoid selecting a high risk SIC and NAICS classification code for your company because this can have a negative impact on your scores.
Now don’t be surprised if your company is not listed with Experian because the only way to establish a small business credit report is when a supplier or lender reports your company’s payment experience to them.
Equifax Business Credit Report
This report could also be referred to as the Equifax Small Business Report and it includes a summary of your company’s financial and non-financial accounts. One of the unique differences in this file is the two credit rating scores known as the Equifax Credit Risk Score and the Equifax Business Failure Score.
Your risk score can range from 101 to 992 with the higher the number being the lower the risk. Some of the factors that contribute to this include derogatory trades, length of history, credit limit amounts and number of employees.
The failure risk score predicts the chances of your business failing over the next 12 months. This number ranges from 1,000 to 1,880 with the higher the number being the lower the risk of possible failure.
Some of the key factors that determine your score include length of time since the oldest account was opened, debt to credit limit ratios, negative payment history and number of trades.
This is another file that gets created only when a supplier or lender reports your company’s payment data. It’s said to be one of the most difficult bureaus to get listed with and this may be because many of the reporting partners are banks and lenders.
This is why I recommend establishing a reporting bank loan as soon as possible. This not only will have a positive impact on your small business credit report but it will also improve your overall bank rating.
As you can see your business credit files require the same level of attention that you give to your personal credit files. By knowing how your company’s risk level is being rated by the major business credit bureaus the greater level of confidence you will have when you apply for business financing.
Looking to access your small business credit reports, a business credit building system with suppliers and lenders that report to all the major business credit bureaus? Become a member of my Business Credit Insiders Circle. Submit your name and email below for details and receive a free audio seminar ($597 value) =>
Marco Carbajo is a business credit expert, author, speaker, and founder of the Business Credit Insiders Circle. A business credit solutions membership helping business owners build small business credit. He is a business credit blogger for All Business.com, a subsidiary of Dun & Bradstreet and author of “Eight Steps to Ultimate Business Credit” and “How to Build Business Credit with No Personal Guarantee.” His articles and blogs have also been featured in American Express Small Business, Business Week, The Washington Post, The San Francisco Tribune, Scotsman Guide, Alltop, Entrepreneur Connect, and Active Rain.
April 14th, 2010 at 1:00 am
awesome work thanks
April 14th, 2010 at 6:47 am
Thanks Tyson! Amazing how the business credit bureaus are just now beginning to push public awareness on business credit reporting.
All the best,
Marco
April 15th, 2010 at 10:34 pm
We usually do not comment on blog posts however yours forced me to, beautiful writing style. just unbelievable!! The subjects are the best I have read to date. Keep it up!
April 15th, 2010 at 10:51 pm
Thanks Sanford! Appreciate the feedback and happy to hear that you enjoyed the information.
All the best!
Marco
April 16th, 2010 at 6:20 am
Thanks Sanford! Your feedback is much appreciated. Be sure to subscribe to my feed so you can receive updates every time there’s a new post.
All the best,
Marco
April 21st, 2010 at 4:08 am
Great article with useful information! Thanks that I’ve stumbled it up.
Cheers!
April 26th, 2010 at 10:38 am
Thank you for your post share. I really like your blog and I have learned something from it.
May 21st, 2010 at 1:55 pm
Hi Marco, your blog’s design is simple and clean and I like it. Your blog posts are superb so please keep them coming. Greets!!!
May 21st, 2010 at 4:17 pm
Thank you for the feedback and glad you like the new look.
All the best,
Marco
June 3rd, 2010 at 9:56 am
We tried to provide D&B with our credit information and they were not interested unless we paid over $500 to become a member, this seems wrong that we should have to pay them to provide their customers with our information.
Is there a way to get D&B and the other Bureaus to create a credit profile on your company without having to pay them to do so?
June 4th, 2010 at 9:43 pm
Hi Mike,
DNB offers several programs of which all are optional. Be sure to read my Product Review on DNBs Programs. Your Small Business Equifax and Corporate Experian file get created only when a lender or creditor that your company does business with supplies the data to those particular bureaus.
Hope that helps you.
You may want to consider becoming a member of my Business Credit Insiders Circle as we provide the step-by-step business credit system that gets you set up with all three major business credit bureaus.
All the best,
Marco
June 5th, 2010 at 7:15 am
Very informative article. I’ve had a lot of questions about business credit and this post is spot on. Thanks.
June 11th, 2010 at 12:04 pm
I found your post while surfing the net. Thanks for sharing and will be sure to follow your blog regularly and will email this post to my friends too!
June 12th, 2010 at 8:34 am
Your welcome Tommy and appreciate the recommendation.
January 20th, 2011 at 4:50 pm
Great to see information about business credit reports as I usually only see things on personal credit. http://www.DandB.com has a great selection for small businesses so thanks for the advice.
January 20th, 2011 at 6:11 pm
Thanks for the feedback Steve and you may want to check out my recent post titled DNB eUpdate: How to Manage Your DUNS Profile Using the New iUpdate. Think you’ll like it.
All the best,
Marco