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Not knowing your business credit score can hold you back. The National Small Business Administration (NSBA) Small Business Access to Capital Study shows business credit is the reason behind 20% of small business loan denials. That means one-fifth of all small business owners are denied the funds they need to purchase equipment, hire employees, invest in marketing or expand into new markets.
But if your business is on track to grow, you don’t have to face rejection after rejection.
Lenders and creditors consider your business credit as one of the deciding factors in whether or not to approve your loan applications. Knowing your score before applying can save you the disappointment of a denial by revealing where your business stands financially. It also gives you the opportunity to improve your business credit score before taking on a loan.
If you’re asking this question or wondering “does my business have a credit score?”, you’re not alone.
The Nav American Dream Gap Survey showed that, as of 2015, 72% of business owners had no idea where to find their business credit scores. 45% didn’t even know their businesses had scores.
Just because you don’t know your score doesn’t mean it can’t affect your business. Typically rated on a scale of 0 to 100, business credit scores show how good you’ve been about making payments on time in the past.
Lending institutions, credit card companies and even potential business partners consider this a good indication of your ability to make future payments. They may be reluctant to work with you if your score is low.
The three major reporting bureaus for business credit – Dun & Bradstreet, Equifax and Experian – use different criteria to determine scores and may look at data from:
Information is tracked under your EIN rather than your Social Security number. This keeps your business credit separate from personal credit so that you can separate your personal and business finances.
To establish a credit file with Dun & Bradstreet, you need a separate number called a DUNS number. Short for Data Universal Numbering System, the DUNS number is a nine-digit number linked to your Dun & Bradstreet credit file. It also serves as a universal way to identify your business.
To get all the important details about your company’s credit profile, you want to ask more than “how do I look up my business credit score?”
A full credit report shows not only your scores from Dun & Bradstreet, Equifax and Experian but also the factors used to arrive at those scores.
Errors on the report can lower your ratings and make your business appear less reliable. Having a complete report gives you the opportunity to identify and dispute incorrect information, preventing it from skewing your score.
Here are five ways to check your business credit score and make sure all the information on the report is correct:
The three major credit bureaus offer full reports at prices ranging from $39.95 to $99.95. Dun & Bradstreet also provides ongoing access and credit monitoring for $149 per month.
You can get the same service from Experian for $179 per month.
Nav provides credit monitoring services to consumers and businesses, including free summaries of reports from all three bureaus. Credit alerts are also included.
Access to full reports and additional credit monitoring/building tools starts at $29.99 per month.
Provided by Dun & Bradstreet, this free credit reporting service grants access to your Dun & Bradstreet score and alerts you to any changes to your report or rating.
You’ll also be notified any time a third party purchases your business credit report. This may occur when a potential partner researches this publicly available information prior to entering a business agreement.
The free seven-day trial of credit monitoring services from Credit.net includes the option to ask, “Find my business credit score!”
Paid services – which include data, analytics and a “dedicated customer support representative” – cost $179 per month with an annual subscription. Instead, you can opt to pay $17.49 each for individual reports as needed.
This is one perk to having your business loan application rejected. When you receive a letter from the credit bureau explaining why you were denied, you can send it back within 90 days along with a request for your business credit report. You’ll receive the report for free.
Small business owners often find it challenging to interpret business credit report information and how it may affect their financial options.
To understand whether you have the credit score needed for a business loan, take a look at what the three bureaus consider a “good” rating:
Dun & Bradstreet bases its scoring on a PAYDEX scale, which indicates when payments are made in reference to due dates. The more prompt you are, the higher score you receive.
Equifax uses a similar scale. Experian’s ratings are based on perceived risk using a system called Intelliscore Plus. A high rating indicates your business isn’t likely to miss payments or default on a loan.
Remember, lenders look at both your business and personal credit scores for a business loan. Ranking well under your business name may not be enough to qualify if your personal credit needs work.
Your ability to qualify for a loan can mean the difference between your business surviving long enough to grow and suffering cash flow problems from which it can’t recover. If you have challenged credit and need funding regardless, there are still plenty of options available.
Small business loans from National Business Capital are available to small business owners with any credit score. As long as you’ve been in business for at least 6 months and make $120K in annual sales, we can find options for you!
Apply now to speak with a business financing advisor about taking your business to the next level!
National Business Capital is the #1 FinTech marketplace offering small business loans and services. Harnessing the power of smart technology and even smarter people, we’ve streamlined the approval process to secure over $1 billion in financing for small business owners to date.
Our expert Business Financing Advisors work within our 75+ Lender Marketplace in real time to give you easy access to the best low-interest SBA loans, short and long-term loans and business lines of credit, as well as a full suite of revenue-driving business services.
We strengthen local communities one small business loan at a time. For every deal we fund, we donate 10 meals to Feeding America!
Joseph Camberato, CEO of National Business Capital, developed a passion for business at a young age. Joe started his company in 2007 in his spare bedroom and has grown to secure over $1 Billion dollars in financing for small business owners nationwide. National’s team has an amazing culture and has been name the #1 Top Workplace on Long Island 3 years in a row and counting. Joe is a trusted financial expert who’s published more than 2,000 articles in the last 3 years. His articles have generated over 5 million page views and has been featured on blogs such as Google News, Yahoo, CNBC, Forbes Magazine, etc. His passion has also inspired him to build the "GrowByJoe” YouTube channel where he shares his insights into small business trends and tips for growth. Joe also holds a seat on Forbes Finance Council and is an active member of the Young Presidents' Organization (YPO), a global leadership community.