By grant
Like a consumer credit score used to determine your creditworthiness, your company has a small business score that summarizes its financial stability. Banks and other lenders often use these numbers to qualify businesses for loans and other financial products.
There isn’t one universal business scoring method, but four different systems used in different situations. Because of this diversity, it is difficult to quote one number as the average small business score. Yet, your business’s growth and operational success often depend on understanding these numbers.
Let’s take a closer look at the four ways your small business score can be calculated.
There are four leading credit reporting agencies used by U.S. businesses: Experian, Equifax, Dun & Bradstreet, and Fair Isaac Corporation (FICO). Each agency utilizes a different scale and criteria to arrive at a numerical rating.
When evaluating the financial health of your business, Experian uses a credit rating called an Intelliscore. This number can range from 0 to 100, and factors in the following criteria:
Equifax uses a multifaceted rating system, with three separate scores based on the following criteria:
The Dun & Bradstreet (DNB) PAYDEX rating is a number between 0 and 100 based entirely on the timeliness of your company’s payments to debtors and bill collectors. To have a PAYDEX score, you need to first register your business for a D-U-N-S (data universal numbering system) number.
The FICO SBSS is the most comprehensive business credit report, and it is the one used most often by large banks and SBA (Small Business Administration) loans. FICO ratings range from 0 to 300, and creditors generally require at least 155-180 to qualify for a loan. Criteria include:
Your business rating may be less than ideal, especially if your company is relatively new and does not have a built-up credit history. Additionally, a poor personal credit history, minimal working capital and assets, and payment delinquencies can further drag down your small business’s grade. Even the most responsible business owners occasionally find themselves without enough cash flow to pay every bill on time.
Fortunately, there are ways to bolster your creditworthiness. For example:
These tips will help you strengthen your small business credit score eventually, but it takes time. If your credit rating is too weak for conventional financing options, consider the Revenued Business Card, an alternative funding option available to virtually all U.S. businesses.
If your business has subprime credit because it lacks operational history or you missed the payment deadline on a few bills, the Revenued Card can help. Qualify based on your revenue history, not your FICO score.
Use the Revenued Card for any business expense, even credit-building expenditures like paying bills or purchasing assets. Furthermore, since we don’t pull your credit score, there won’t be a detrimental “hard inquiry” that appears on your report.
To learn more about the Revenued Business Card and to find out if you qualify, call +1-877-662-3489 or fill out our online form.
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