Your business credit score plays a significant role in your financial health. When you apply for a loan, lenders use your score to determine how much you will pay for the loan. Unlike consumer credit scores, the business credit score is not standardized and varies from bureau to bureau. You can't rely on one credit bureau for accurate credit scores.
Equifax
Equifax, which has been providing credit scores since 1996, now offers reports to consumers. These reports contain public records, 12-month history of payments, and comments by credit grantors in the past. These reports are available to consumers for purposes of applying for credit and setting credit limits. These reports can be used by businesses to help them monitor their financial health.
Equifax offers two scores to companies: a credit score and a business risk score. The credit risk score measures how credit-worthy a company. It ranges between one to nine hundred. The business failure score, however, is between one thousand and twelve hundred. It measures how likely a company is to fail in the next twelve-months.
Experian
An Experian credit score for a business is a number from one to one hundred based on a risk factor for delinquent payments and defaults. A lower score means that you are at greater risk. Experian calculates the score by using over 800 variables. These include information obtained from credit card companies and legal filings. It also includes information from public files and demographic information. Businesses with a score of one to ten are considered high-risk by lenders, while those with a score of eleven to fifty-five are considered medium-risk. A score between 76-100 and seventy-five-one hundred indicates low-to moderate risk.
Your Experian credit score may determine whether or not your application is approved for credit cards or loans. A high score is more likely to be approved for the loan/credit that you apply, while a lower score can lead to rejection.
TransUnion
TransUnion is a credit score business that provides a free credit report to consumers every year. It also offers credit monitoring products and insurance that protects consumers from identity theft. The company was accused of using deceptive advertising practices. However, this does not render the company a bad one.
TransUnion uses its own algorithm to calculate credit scores. This is a reflection of TransUnion's credibility and ability to assess risk. TransUnion credit scores should not be relied upon by consumers for decisions about credit cards, auto loans, and mortgages. Consumers should be careful to monitor their credit reports and avoid making any mistakes that could cause credit scores to plummet.
Experian Business Lifespan
Experian is the world's largest information provider. Experian assists businesses in implementing successful customer relations management, marketing, and risk management strategies. Experian's business longevity reports provide a summary of a company’s credit history as well as a prediction of its risk of default in the next 12 month.
Experian Intelliscore Plus
Experian Intelliscore Plus provides a way to get a credit score that will work for your business. This model pulls in over 800 owners and company data points to produce a single score. Experian's proprietary formula calculates the scores. While it is impossible that you know all the factors that impact your business score and how they affect your score, you can still use the data to make informed decision. Your payment history is one of the most important aspects of your score. You can improve your score by avoiding late payments or delinquent transactions.
Your credit score is essential for getting a loan. Many lenders prefer to use the Intelliscore because it is a reliable indicator of the risk that your business will default on its payments. The score is a combination o of current payment status, percentages of delinquent accounts, overall trade balance, and the percentage of defaulted accounts.