How Business Credit Scores Work

Having a business credit score is a must if you want to do any borrowing on behalf of your company, and though most business owners need a good score, they often don’t know the basics on how scores are calculated, or what is considered a good score.  This article will tell you the importance of knowing your score before a loan application, and how to get the best score from all three major business credit reporting bureaus.

How Are Business Credit Scores Calculated?

Just like with a personal credit score, a business credit score is calculated by examining a number of different quantifiable factors.  These factors can include things such as your payment history, your company size, whether you have current outstanding debts, as well as negative public records against your company.  At times, even industry risk can lead to a lower credit score.

You might notice that many of these factors are also used to check out your regular personal finance credit score.  This is normal, however, it’s important to remember that your personal finances will not impact a business score.  Similarly, each major credit bureau has a slightly different algorithm for credit score calculation.  Here’s what you need to know about each …

Dun and Bradstreet (PAYDEX)

PAYDEX is the top score used by lenders, and this means it’s the most important one.  D&B is dollar weighted, and also happens to be the most performance-based of the three scores.  This means that a good payment history will almost always yield a good score.  Paying earlier is usually the only way to get a score of 90 to 100, so make sure to speed up payments if possible.

The best score you can get is a perfect 100 on PAYDEX, with scores of at least 80 being considered.  A score of 50 to 79 is considered “middle of the road,” and will likely end up getting higher interest rates, or even rejection.  A score below 50 is usually deemed high risk and unacceptable.

Intelliscore Plus From Experian

Experian’s score is based on both the potential as well as the actual performance of your company.  Its score is used to predict how likely it is that your company will become delinquent in the next year, and much like PAYDEX, its score ranges from 0 to 100.  76 and up is considered a low-risk score, while anything under 25 is thought to be a high risk score.

It’s important to know that Intelliscore is calculated from over 800 different factors, so it’s often hard to control all of those scores.  As long as you pay your bills on time and have a relatively low risk industry, you will be able to get a decent score.


Fair Isaac is most regularly associated with personal credit, but they do business credit as well.  This ranks people on how regularly they make payments on time, and the scores can range anywhere from 0 to 300.  The higher the score, the better you stand.  It’s also smart to know that high credit scores for SBSS also will take in the variety of accounts you have into consideration.

With FICO SBSS, getting a good score is pretty simple.  The majority of the score is based on the length of a company’s history, as well as the number of on time payments.  SBSS scores are used for SBA scores, and the current cutoff score is a minimum of 140.  Most lenders will want to see a bare minimum of 160, though.

Why Check My Business Credit?

As a business owner, it’s up to you to keep an eye on all your financial accounts – and that includes your business credit, too.  Business credit scores are very fluid, so keeping a regular check on them will allow you to know whether or not your company’s standing is improving, and whether you can get a loan if you need it.