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What Is a Business Credit Score?

06/2/2022

A credit agency assigns your business credit score as an assessment of your business’s creditworthiness. This score is a factor that financiers, banks, landlords, and lenders consider when deciding if, how much, and at what rate to loan your business money. The agency's assessment also indicates how likely your business is to repay a loan.

Business Credit Scores vs. Personal Credit Scores

There are some key differences between personal and business credit scores that you should know about.

  • Your personal credit score is a number between 300 and 850 that shows how risky you are to lenders. A score of 700 or above is considered good, while a score of 800 or above is considered excellent.
  • Business credit scores are usually between 1 and 100 depending on the bureau, with a score of 75 or higher being considered excellent.
  • To access your personal credit score, a 3rd-party will need either written or expressed authorization. 
  • Business credit scores, however, may be accessed by anyone through the issuing agency.
  • Note Experian, Equifax and Transunion also give business credit scores.

How Business Credit Scores Are Calculated

The general rubric used by all the credit bureaus factors in:

  • A business's credit lines applied for in the past 9 months
  • A business's credit lines opened in the past 6 months
  • A business's credit repayment history over the past 12 months
  • Late payments on a business's record
  • Length of time and business and total business credit history

How to Improve a Business Credit Score

Although there is no one-size-fits-all solution for improving business credit scores, there are a few fast ways to do so. This includes paying down existing debt quickly and being mindful of the number of your submitted loans, especially if multiple applications are submitted within a 9-month period. The slower, but far more gratifying, way to improve your business credit score is to establish a good payment history over time.

Time is also a business’s friend, as scores increase the longer a business is open—as long as it hasn’t taken on more funding than it can repay.

Bottom Line: Is a Business Credit Score Essential?

Small business owners should not ignore their credit scores, as some types of business financing emphasize personal credit scores over business credit scores. However, not all business financing options use credit scores in their decisions. With SBS Funding Group you would only need to have a score of 500+, to apply for a loan, making us a great option when looking for a small business funding. You can verify your business and see how much you can borrow, we don’t ask for collateral, there are no set terms, no-obligation quotes and we look beyond credit. Go to https://sbsfg.com/verify-my-business/ or call (855) 222-3593 - info@sbsfg.com