What are the different types of business credit scores?
Quick insights
- A business credit score may be used to assist potential lenders with determining your business’s creditworthiness and level of risk.
- There are various types of business scores offered by credit bureaus, such as the Dun & Bradstreet® (D&B) Delinquency Predictor Score and Experian™ Intelliscore Plus℠.
- Business credit scores can be influenced by factors such as credit utilization, so it can be helpful to monitor your score and credit behaviors.
Business credit history can influence things like approvals, annual percentage rates (APRs), credit limits and more. In addition, vendors may use your business credit history to decide if they want to do business. There are a few types of business credit scores. Let’s review them in detail below.
Types of business credit scores
Similar to personal scores, business credit scores are generated by a few different credit bureaus; however, unlike personal scores, each credit bureau uses their own score and measurements. These credit bureaus include D&B, Experian and Equifax. Each of these bureaus provides slightly different types of credit scores. Let’s review them below.
Dun & Bradstreet credit scores
Dun & Bradstreet (D&B) is a bureau that offers a PAYDEX score. This score ranges from 1 to 100, with higher scores indicating 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 assesses 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(R): 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℠ score
FICO® offers a Small Business Scoring Service℠ (SBSS) Score, which is often used specifically with small businesses. Ranging from 0 to 300, this score may be used by lenders to help make important decisions about loan terms on credit lines.
Experian's Intelliscore Plus
The business credit score model from Experian ranges from 300-850, with higher scores indicating lower risk. Intelliscore Plus considers many variables when calculating scores, such as payment history, frequency of payments, credit utilization, business background 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 to 100, with higher scores indicating a healthier credit score. Your payment history is used to help generate this score. For example, if you have a positive payment history where you consistently make on-time payments towards your debts, your payment index score may be higher than if you had poor payment history.
- Credit risk score: This number ranges from 101 to 992 with higher scores indicating less risk. This score is used by lenders to help make important decisions, such as how much credit to offer you.
- Failure risk score: Ranging from 1,000 to 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.
Key components that influence business credit scores
While different types of business credit scores may be calculated differently, business credit scores can be impacted by several factors. Similar to a personal credit score, you can positively or negatively impact your business credit score depending on your credit behaviors. For example, since payment history is an important part of your business credit score, you could find that making regular, on-time payments can improve your score.
Additionally, factors such as credit utilization, company size, industry type and credit history can also influence your score. It can be important to review your business credit score so that you can stay aware of how these factors are affecting it.
In conclusion
There are several types of business credit scores out there. The one you use may depend on the type of business you own, industry and what information it is you or your lenders are looking for when making financial decisions. Like your personal credit score, it can be essential to keep a close eye on your credit behaviors and find ways to help improve your score. A healthy business credit score can help you save money on interest costs, access higher lines of credit and more.
