A good business credit score is vital for securing loans, negotiating better payment terms, and building credibility in the marketplace. Whether you’re launching a startup or scaling an existing company, understanding how business credit scores are calculated is essential for long-term financial health.
This comprehensive guide explores how business credit scores work, the key factors that affect them, and actionable steps you can take to improve your business credit profile.
What Is a Business Credit Score?
A business credit score is a numerical representation of your company’s creditworthiness, similar to a personal credit score. It helps lenders, suppliers, insurers, and other partners determine how likely your business is to repay debts on time.
Unlike personal credit scores, which range from 300 to 850, most business credit scores range from 0 to 100, although different credit bureaus may use different scoring models.
Why Business Credit Scores Matter
Business credit scores are crucial for:
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Loan approvals: Lenders evaluate your score when deciding whether to offer financing.
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Supplier terms: Vendors may offer better payment terms to businesses with higher credit scores.
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Interest rates: A higher score typically leads to lower interest rates.
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Business growth: Access to capital and partnerships becomes easier with strong credit.
Maintaining a healthy score ensures your business can seize new opportunities with confidence.
Who Calculates Business Credit Scores?
There are three major business credit reporting agencies that calculate and manage business credit scores:
1. Dun & Bradstreet (D&B)
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Score range: 0 to 100 (Paydex score)
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Focus: Payment history with suppliers and vendors
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Other scores: Delinquency Predictor Score, Financial Stress Score
2. Experian Business
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Score range: 1 to 100 (Intelliscore Plus)
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Focus: Payment trends, credit utilization, and legal filings
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Combines: Public and private data sources
3. Equifax Business
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Score range: 101 to 992 (Business Credit Risk Score)
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Focus: Payment trends, credit history, business demographics
Each bureau uses proprietary algorithms, but all evaluate similar categories of data.
Factors That Influence Business Credit Scores
While each bureau uses its own model, the main components include:
1. Payment History
One of the most heavily weighted factors. On-time payments build trust and raise scores.
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Consistently paying invoices early or on time helps.
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Late or missed payments quickly drag down your score.
2. Credit Utilization
Refers to the percentage of your credit limit you’re using.
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A utilization rate below 30% is considered healthy.
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High balances relative to your limits can signal risk.
3. Company Age and Size
Older, more established businesses typically have more robust credit files.
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Startups may take longer to build a credit profile.
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Larger businesses tend to have more payment relationships.
4. Public Records
Negative marks such as bankruptcies, liens, or judgments can severely impact your score.
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Avoid legal disputes and ensure taxes are filed on time.
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Resolve any business-related lawsuits quickly.
5. Industry Risk
Some industries are seen as riskier by lenders and may be scored more conservatively.
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For example, restaurants and construction firms may face stricter scoring models.
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The NAICS or SIC code tied to your business influences perceived risk.
6. Business Financials
Revenue, profit margins, and operating cash flow can all affect your score indirectly.
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Some scores take financial statements into account (if submitted voluntarily).
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Consistent growth and profitability help.
How to Calculate Your Business Credit Score (Simplified)
Though the full formulas are proprietary, here’s a simplified breakdown of what goes into a business credit score:
| Factor | Approximate Weight |
|---|---|
| Payment history | 35–40% |
| Credit utilization | 20–30% |
| Business age | 10–15% |
| Public records | 10–15% |
| Credit mix (vendors, loans, leases) | 5–10% |
| Industry risk and other factors | 5–10% |
Each bureau might place different emphasis on each of these components.
How to Check Your Business Credit Score
Here’s how to access your score through the main agencies:
Dun & Bradstreet
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Get a free D-U-N-S Number if you don’t already have one
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Access the CreditSignal tool for basic score updates
Experian Business
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Use Experian’s Business Credit Advantage service
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One-time reports or subscriptions are available
Equifax Business
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Request reports through their website or third-party resellers
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Offers Business Credit Monitor and other tools
Some services charge a fee, while others offer free limited access.
Tips to Improve Your Business Credit Score
Improving your score doesn’t happen overnight, but here are strategies to help:
1. Pay Vendors and Lenders Early
Not just on time—early payments can improve your D&B Paydex score.
2. Open Trade Lines
Establish accounts with suppliers that report to credit bureaus.
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Ask vendors to report your payments.
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Common trade line vendors include Uline, Quill, and Grainger.
3. Separate Personal and Business Finances
Use a business bank account and apply for a business credit card.
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Avoid using your personal credit for business purchases.
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Helps build a distinct credit file.
4. Monitor Your Credit File
Check regularly for errors or outdated information.
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Dispute inaccuracies with the credit bureau.
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Monitor for fraud or unexpected changes.
5. Limit Credit Inquiries
Too many inquiries in a short period can lower your score.
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Only apply for credit when necessary.
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Space out applications over time.
6. File Financial Statements (Optional)
Some bureaus allow you to submit annual revenue and balance sheet info.
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Increases credibility and score transparency.
Common Mistakes That Lower Business Credit Scores
Avoid these pitfalls to keep your score healthy:
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Late payments
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Ignoring small debts
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Overusing credit
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Mixing business and personal funds
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Failing to update business information
Being proactive and organized with your finances is key.
How Long Does It Take to Build a Good Score?
Most businesses can build a positive credit profile in 6 to 12 months, provided:
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They work with vendors that report to bureaus
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Payments are made on time
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Trade lines are used responsibly
The longer your business operates with solid financial habits, the higher your score will climb.
Final Thoughts
Understanding how business credit scores are calculated gives you the tools to build and maintain a strong financial foundation for your company. Whether you’re applying for loans, negotiating supplier contracts, or preparing for expansion, a strong credit profile opens doors.
By paying on time, monitoring your report, and establishing multiple trade lines, your business can enjoy better terms, greater trust, and more growth opportunities.