Your overall financial health depends on your credit score. Lenders will use your score to determine how much loan you will be able to repay. Unlike consumer credit scores, the business credit score is not standardized and varies from bureau to bureau. In other words, you cannot depend on one credit bureau in order to get accurate credit scores.
Equifax
Equifax, which is in the credit scoring business since 1996, provides consumer reports. These reports include public information, 12-month payment histories, and comments from credit grantors. Consumers can use these reports to apply for credit and set credit limits. These reports are also helpful for businesses, as they help them track their financial health.
Equifax provides two different scores to companies: a score for credit risk and a score for business failure. The credit score is a number that ranges from one to nine hundred. It indicates how credit-worthy a company. 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, which is used to measure a business' risk for defaults and delinquent payments, can range from one to 100. A higher number signifies a lower risk. Experian calculates your score using more than 800 variables. These include information from legal filings and credit card companies. It also collects information from public records, and demographic information. Lenders consider businesses with scores of one to ten high-risk. Businesses with scores of eleven to fifty five are considered moderate-risk. A score between 76-100 and seventy-five-one hundred indicates low-to moderate risk.
Your Experian credit score can determine whether or not you're approved for a loan or credit card. A high score will be likely to get approved for the loan or credit that you apply for. Conversely, a low score might result in loan rejection.
TransUnion
TransUnion, a credit score company, provides free credit reports to all consumers each year. It also offers credit monitoring products and insurance that protects consumers from identity theft. However, it has been accused by deceptive market practices. This does not mean that the company is a bad business.
TransUnion employs its own algorithm to calculate credit scores. This reflects the trust and expertise of TransUnion in assessing risk. TransUnion credit scores are not sufficient to make decisions about auto loans, mortgages or credit cards. To avoid damaging their credit scores, they should instead carefully review their credit reports.
Experian Business Longevity
Experian is a major information provider worldwide. Experian provides support to businesses with successful customer management, marketing, risk management, and customer relationships strategies. Experian's Business Longevity Report provides a summary about a company’s credit history, and forecasts its risk for delinquency over the next 12 months.
Experian Intelliscore Plus
Experian Intelliscore Plus will give you a credit score for you business. This model draws on over 800 data points from owners and companies to generate a single score. Experian's proprietary formula calculates the scores. Though it is impossible to know exactly which factors impact your business score, you can use the data to make informed decisions. One of the most important factors in your score is your payment history. To improve your score, avoid late payments and delinquent accounts.
A credit score for your business is an important part of getting a loan for your business. 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 of your current payment status, the percentage of delinquent account and your overall trade balance.