What is the best possible business credit score?

Quick insights

• The highest business credit score varies depending on which credit scoring model is used.
• Unlike consumer scores, business scores have no standardized credit ranking systems, which is why they can vary a lot.
• A good business credit score is typically built on a few key factors, including a healthy payment history and a low credit utilization ratio.

Business credit scores, like personal credit scores, can mean different things depending on the scoring model used. Let’s explore more together.

Introduction to business credit scores

Business credit scores provide an indication of your company’s risk and creditworthiness. It can help lenders determine business loan approvals, rates and more. They differ from personal credit scores in a few ways, such as using different scoring models and factoring in a business’s industry type/risk. Most business credit scores need to be requested from the credit bureau(s) and may come at a cost, unlike some personal credit scores, which may be provided for free by some services and financial institutions.

Highest business credit score

To help you understand what the highest business credit score can look like, let’s breakdown the different types of business credit scores from each credit bureau:

Dun & Bradstreet^® credit scores

Dun & Bradstreet (D&B) is a bureau that offers a PAYDEX score, which ranges from 1-100. The higher scores indicate better payment performance. PAYDEX primarily measures a business's payment history to its suppliers and creditors.

D&B also offers other business scores, including but not limited to:

• Delinquency Predictor Score (DPS)^®: This score assess the likelihood of a company failing to make their payments on time using a scale of 101 (low risk) to 670 (high risk).
• Failure Score^®: Looking over a course of 12 months, this score looks at a company’s risk of falling into bankruptcy or other financial stress.

FICO Small Business Scoring Service (SBSS)

FICO provides small businesses with the SBSS credit score. This score ranges from 0-300; higher scores can indicate that you are lesser risk to potential lenders. Typically, an SBSS score of at least 140 is considered good, but lenders may have minimum credit score requirements that are higher than that.

Intelliscore Plus^℠ by Experian™

Similar to personal credit scores, this business credit score model from Experian ranges from 300-850, with higher scores indicating lower risk. Intelliscore Plus considers many variables, such as payment history, frequency of payments, credit utilization, business history and more.

Equifax business credit scores

This credit bureau provides three different types of business credit scores. These include:

• Payment index score: This number ranges from 1-100, with higher scores indicating a healthier credit profile.
• Credit risk score: This number ranges from 101-992 with higher scores indicating less risk.
• Failure risk score: Ranging from 1,000-1,610, this score accounts for demographic information, company records and payment history. The lower this score, the higher the risk of your company going out of business within the next year.

Benefits of a good business credit score

Similar to personal credit scores, a good business credit score can help open up potential opportunities as opposed to a business with a poor credit score. For example:

• Improved chances of getting approved and better terms. A good business credit score may help you get approved for business lines of credit and access more favorable terms and annual percentage rates (APRs).
• Increased chances of higher credit limits. With a good business credit score, you may be approved for higher credit limits, both from lenders and suppliers, which may facilitate larger transactions and business growth.
• Potential lower insurance premiums: Insurers often offer lower premiums to businesses with excellent credit scores as they are perceived as lower risk.
• Potential for enhanced business reputation: A good or perfect business score may enhance a business's reputation as low risk and reliable. This could positively impact future financial ventures.

What factors affect your business credit score?

Business credit scores are built upon several key components. These include:

• Payment history: Payment history is your business’s ability to make consistent, timely payments. Making consistent, timely payments can show potential lenders your ability to wisely manage your credit and avoid debt accumulation.
• Credit utilization ratio: Take the amount of credit your business uses and divide that by your business’s total available credit; multiply by 100% and you get your credit utilization ratio. Lowering this ratio to 30% or less can have a positive impact on your score.
• Types of credit: Types of credit includes credit cards, loans, and more.
• Length of credit history: Older credit accounts positively impact a score as they demonstrate a longer history of managing credit.
• Company's financial performance: Strong revenue and profitability metrics can positively influence a business credit score.
• Industry risk: This refers to how risky opening your business may be and whether the industry you’re in is steady and growing or not.
• Public records: These include bankruptcies, tax liens and judgments and may negatively impact your business’s score.

Why business credit scores are important

Like personal credit scores, business credit scores can be an important part of your business’s overall financial health. This is because a good score has the potential to help you save on interest costs, increase the amount you can borrow and more. With a good business credit score, you could achieve more than if you had a poor credit score. It could positively impact your company’s reputation and maybe grant you opportunities for more growth.

Business credit scores can also be a helpful tool when it comes to assessing your business’s financial health. Reviewing your business credit score and report may provide you with insight and knowledge needed to make the next financial decision. They also provide risk assessment, meaning that you can see the likelihood of your business going bankrupt in the coming years. Finally, your business score can play an important role when it comes to negotiating terms with your suppliers, such as higher credit limits.

In conclusion

The highest possible business credit score ranges depending on what credit scoring model you use and, as explained above, with some models, lower scores are better. A healthy business credit score can help to unlock future business opportunities and growth, so it’s important to understand the factors that go into achieving a good score.