Most small business owners are familiar with the process of applying for funding to launch or scale their ventures. You gather documentation — including your business’s financial details like revenue and expenses, find a lender, and apply for the financing that best fits your needs.
But whether you’re applying for a business loan, credit card, or line of credit, lenders will closely examine your company’s financial standing. That means pulling and reviewing your business credit report.
Here’s a breakdown of what’s inside a business credit report, how to interpret it, and how it can influence your company’s future.
What Is a Business Credit Report?
A business credit report functions as a financial background check for your company. It gives lenders, investors, vendors, and partners a look into your business’s creditworthiness.
It’s a standard part of the due diligence process before providing funding or extending trade credit. The report helps evaluate:
- The risk of working with or lending to your business
- Your history of paying debts, invoices, and loans
- Any red flags, such as legal actions for non-payment
A solid report indicates fiscal responsibility; derogatory marks like liens or bankruptcies can significantly lower your score.
How Is a Business Credit Report Different from a Personal Credit Score?
Your personal credit score reflects your history with personal financial products like credit cards, mortgages, or auto loans.
A business credit report, on the other hand, focuses on your company’s financial activity — including:
- Business loans
- Trade credit with vendors
- Payment patterns
- Public filings related to the company
Unlike personal reports, business credit scores can vary significantly between bureaus. That’s because vendors and creditors aren’t required to report to all agencies, and the criteria differ by bureau. You may find different scores across Dun & Bradstreet, Equifax, and Experian.
Note: This is common — don’t be alarmed by variations across reports.
What’s Included in a Business Credit Report?
Business credit reports vary in format, but they typically include the following sections:
Company Summary
Basic information about your business, including:
- Legal structure
- Subsidiaries or parent entities
- Number of employees
- Years in operation
Payment History
Shows how your business pays vendors and suppliers. Some reports break this down monthly or quarterly, highlighting consistent or late payments.
Collections, Judgments & Liens
Any legal actions or penalties due to non-payment will appear here. These are major concerns for lenders and can heavily impact your ability to secure funding.
Risk Rating
A risk rating or failure score reflects the likelihood your business may default or close within the next 12 months. This may be influenced by your industry’s average failure rate.
Credit Summary
Details your business’s:
- Credit limits
- Current credit balances
- Recent credit inquiries
- Utilization ratios
This helps lenders assess how your company manages available credit.
Where Can You Get a Business Credit Report?
The three main providers are:
- Dun & Bradstreet
- Experian
- Equifax
You’ll typically need to pay a fee to access your full business credit report. Some platforms offer one-time purchases, while others provide monthly subscriptions with ongoing monitoring.
How Does a Business Credit Report Affect Your Company’s Future?
A strong business credit report is essential for growth and expansion. Whether you’re:
- Opening new locations
- Hiring more staff
- Restocking inventory
- Launching new services
You’ll likely need financing to make it happen.
Lenders rely heavily on your credit report when deciding whether to approve your application. In many cases, a good or poor report can make or break your funding opportunity.
If your report includes negative items like liens or bankruptcies, don’t panic, these won’t stay forever.
Each credit bureau has its own guidelines for how long derogatory marks stay on file. If you’re recovering from a legal issue or bankruptcy, waiting a bit before reapplying for credit may be in your best interest.
