It’s important that entrepreneurs understand about their company’s commercial credit score, because it can impact business loan rates, vendor terms, insurance premiums, and other financial options.

The major reporting agencies that track commercial credit activity are Dun & Bradstreet® (D&B), Experian Business®, Equifax Business®, and Business Credit USA®.

Start with a review of all of your business’ credit reports and credit scores. Unlike personal credit scores, which are ranked on a scale of 300 to 850, business credit scores have a 0 to 100 scale, with a credit score of 75 or better considered good or excellent depending on the lender.

Incorporate and Get IRS Legal

Separate personal and business assets by creating a legal business entity distinct from your personal life and your household assets and debts. Contact an attorney to discuss forming a Limited Liability Company (LLC) or some other legal business entity to differentiate between business and personal finances. A credit report for a legal corporation, as opposed to a sole proprietorship or partnership, does not include personal credit information, so your new business can start with a clean slate.

Then, register with the IRS to obtain an Employer Identification Number (EIN) to legally identify your new business entity, even if you do not have employees yet. You can even apply for an EIN online at the IRS website.

What Goes Into Business Credit Score Calculations?

The reporting agencies consider many factors in determining a credit score.

  • The timeliness of payments over a period of time. Business credit scores indicate the likelihood of late payments – something of genuine interest to lenders and vendors.
  • Available credit, including credit cards and commercial lines of credit. A portfolio of available credit sources is an indicator of trust by others associated with a business.
  • The length of time you’ve had a commercial credit profile. In some cases, small business owners rely on personal credit history to secure commercial financing. The longer your business’ credit history, the more information stakeholders have about your company’s ability to make payments long term.
  • The number of inquiries from outside businesses seeking more information on your company’s credit. This may indicate that you’re shopping around for a new loan that hasn’t yet shown up on your report.

Get Your Business in Order.

Small businesses may have a long credit history, but that history may not show up when a vendor or lender obtains the company’s credit history. Why? If you use personal assets – a second mortgage, for example – to finance a business, that investment won’t show up on your commercial credit report.

Pay down as much company debt as possible. Get your commercial credit under tight control, then contact the four primary reporting agencies and start building a commercial credit profile. The sooner the better – good credit takes time.

Regularly Pull Company Credit Scores

A growing business may experience more ups and downs than a long-established company with contingency assets.

Subscribe to the reporting agencies and track your credit score. By making small changes, like paying down credit card debt, you can improve the company’s profile, and increase the likelihood of obtaining commercial credit from lending agencies, sub-contractors, and business angels.

Commercial Credit Scores Build Trust and Business Synergies

A good commercial credit history is a trust builder, often providing access to additional commercial credit used to take businesses to the next level.

Financial stakeholders, and even potential clients, may perform due diligence by pulling up your commercial credit scores. And, indeed, business decisions are sometimes based on these credit scores. A company with a low commercial credit score may not get that line of credit, or if it does, it may cost more in interest.

A good credit score – an established commercial credit history – may have a significant impact on business options in the future. If commercial credit isn’t available, or too expensive, your options are limited.

Each credit reporting agency employs a different method of calculating your business credit score, so contact all four reporting agencies, register today, and start building a commercial credit history that opens more doors in the future. 


The information provided is presented for general informational purposes only and does not constitute tax, legal or business advice.