Good business credit is just as essential for your company as a high personal credit score is for your own financial health. A business credit score reflects your company’s financial responsibility and ability to meet its obligations. But did you know that the benefits of good business credit go far beyond just qualifying for loans?
Building credit helps create a financial identity for your business that’s separate from your personal credit, offering protection between business liabilities and your own finances.
Naturally, good business credit makes it easier to access funding. And the more financing options available, the better your business can manage cash flow, handle unexpected expenses, and seize new opportunities, whether through loans or trade credit.
But the benefits don’t stop there. A strong business credit score could help you:
You’re probably familiar with personal credit scores, which reflect your financial history and help lenders gauge your individual creditworthiness. Business credit works similarly, but there are a few key differences.
While personal credit scores are based on FICO algorithms, business credit doesn’t have a single standard scoring model. Instead, agencies like Dun & Bradstreet, Experian, and Equifax use their own formulas and data, including:
Also unlike personal credit, business credit reports are public, meaning clients, suppliers, lenders, or even competitors can access your score.
Note: Businesses aren’t entitled to a free credit report each year like individuals are. You’ll generally need to pay to view your full report.
To establish credit, your business must begin showing up on the radar of reporting agencies. This includes having accounts in your business’s name, such as:
For Dun & Bradstreet, you’ll need to get a D-U-N-S® Number and have payment records with at least three vendors to receive a PAYDEX® score, which measures payment timeliness.
You can check whether your business already has a DUNS number, D&B may have assigned one automatically.
Each bureau offers both one-time reports and ongoing monitoring. While some platforms offer free partial reports, you’ll likely need to pay for full access to your business credit score and detailed file.
Mistakes happen, and they can damage your score. Review your business credit at least every six months, and no less than once per year.
If you find inaccuracies or fraudulent activity, contact the credit bureau immediately to dispute and correct the issue.