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Business credit report
How to Pull a Business Credit Report & Decipher It
A business credit report is a record of a business’s financial history, allowing others to determine a business’s creditworthiness. The information from the credit report is used to calculate a business credit score. Business credit reports can be pulled from Dun & Bradstreet (D&B), Experian, Equifax, and FICO for a cost of $50 to $230.
What a Business Credit Report Is
A business credit report is a document that assesses the creditworthiness of a company. It typically evaluates information on a company’s business structure, industry, financial performance, and payment history. A credit report is used by vendors, lenders, and other creditors to check the credit of a potential partner company.
- General company information
- History of the business
- Business registration information
- Government activity summary
- Company operational data
- Industry data
- Public filings (liens, judgments, and UCC filings)
- Past payment history
Business reports are created by each of the three main credit reporting bureaus, as well as by FICO. While the information on these four credit reports is generally the same, each report has its own proprietary method for calculating its respective business credit score. It’s extremely important to check business credit reports and ensure they’re accurate at least once a quarter.
Why a Business Credit Report Is Important
A business credit report is important because vendors, lenders, and creditors use them to determine a company’s business creditworthiness. For example, a company with a good credit report is more likely to negotiate favorable terms with their creditors, lessors, and suppliers compared to a company with a credit report filled with negative items.
The parties that a business credit report is important for are:
- Companies that are negotiating payment terms with vendors, suppliers, or customers
- Companies that are getting pre-approved for a loan
- Creditors that are assessing the application of a potential business borrower
If you’re negotiating payment terms with a vendor, chances are you can receive better payment terms if you have good credit. This allows you to float payments to that vendor while you wait for payment from your customers. On the flip side, if you’re a B2B company assessing the creditworthiness of a potential customer, you can pull that customer’s business credit to protect your company from late or delinquent payments.
How to Pull a Business Credit Report
Pulling a business credit report from one of the four credit reporting bureaus can be done online, takes just a few minutes, and will cost between $49 and $229. Each credit report has information such as the history of the business, past payment history, and a business credit score that is specific to the reporting agency.
Where to Get a Business Credit Report
Business Credit Report Providers
Business reports are generated by the three major credit bureaus. including D&B, Experian, and Equifax. FICO also has a business credit score, which pulls information directly from these three credit bureaus. Let’s take a closer look at how to get a business credit report at the four credit reporting bureaus.
1. Dun & Bradstreet Business Credit Report
The Dun & Bradstreet business report, also known as the D&B credit report, is the most commonly used business report for trade partners. It takes into account data such as payment history information, historical financial performance, and industry information to assess a company’s creditworthiness.
- PAYDEX Score (1 – 100): Used to rate a company’s ability to pay its past debts over a two-year period, with 100 being the best.
- Commercial Credit Score (101 – 670): Used to predict the chances that a company will default on its payments within a year, with 670 being the least likely.
- Financial Stress Score (1,001 – 1,875): Used to predict the likelihood that a business will go out of business within a year, with 1,875 being the least likely.
Where to Get a Dun & Bradstreet Business Credit Report
When getting your D&B credit report, the first step is to search their website for an existing report. You can do that by navigating to their website and clicking “company search” in the upper right-hand corner. If your company exists in the database, you can purchase your report for as little as $61.
If you don’t have an existing report, meaning no creditors or vendors have reported your business, you can get your report by applying for your own DUNS number, which is the Dun & Bradstreet nine-digit identifier. The one-time fee is $229. Alternatively, if you want unlimited access to your credit report, you can purchase Dun & Bradstreet’s CreditBuilder Plus starting at $149 per month.
2. Experian Business Credit Report
Unlike D&B’s three scores, Experian only provides the Credit Ranking Intelliscore, and is one of the most straight-forward reports available. The Experian Credit Ranking Intelliscore ranges from 0 – 100, where a higher score represents a lower risk of late payments. Experian takes into account business background information, collection history, financial information, and other public data.
Where to Get an Experian Business Credit Report
Unlike Dun & Bradstreet, Experian doesn’t require you to create an account or obtain a number. Instead, Experian combs public data such as government records to collect information on your company and generate a business report.
3. Equifax Business Credit Report
Equifax uses industry data, public records, trade payment, and financial payment history to assess the creditworthiness of a company. However, unlike Experian and Dun & Bradstreet, Equifax calculates their business credit scores by taking into account available credit, late payments, age of financial accounts, negative payment transactions, and more.
The three scores that Equifax generates with this information are:
- Business Payment Index (0 – 100): Measures payment history to past creditors over the past 12 months, with 100 representing early or on-time payments.
- Business Credit Risk Score (101 – 992): Evaluates the likelihood that a business will be more than 90 days overdue on financial obligations, with 992 being the least likely.
- Business Failure Score (1,000 – 1,880): Evaluates the likelihood that a business will go bankrupt in the next 12 months, with 1,880 being the least likely.
Where to Get an Equifax Business Credit Report
Similar to Experian, Equifax doesn’t require you to obtain an ID number or fill out any paperwork. Instead, Experian uses all available public data, such as new business filings with the Secretary of State, to generate a credit report. You can get your Equifax business report for as little as $99.95 by navigating to their website and clicking the “contact us” button.
4. FICO SBSS Business Credit Report
FICO pulls information from the three credit bureaus to generate a score that is most commonly used to approve SBA loans and lines of credit. The LiquidCredit SBSS score, which ranges from 0 – 300, measures the chance a company will become delinquent on its payments. A score of 300 shows that this is least likely to happen.
Where to Get a FICO SBSS Business Credit Report
Since FICO pulls information from the three existing credit bureaus and their reports, the SBSS is more of a score than it is a report. Still, it’s important to understand your business’ FICO SBSS score. Your FICO SBSS score is available for purchase with NAV for $49.99.
How to Read Your Business Credit Report
Once you get your report, it’s important to review the information in detail. All four reports generally contain the same types of information, such as your business profile, industry codes, trade payment history, commercial financial history, UCC filings, and your business credit score. To illustrate this, we’ve provided screenshots from a sample Experian report.
1. Business Profile
Your business profile is usually the first thing that shows up on your business credit report. Within your profile, you’ll find your business’ legal name, trade name, and the address of your headquarters.
- Incorporation details
- Business type
- Parent and subsidiary details
- The number of employees
- Years in operation
Financial data will also be included in your typical business profile section. This data includes annual sales and profit pulled from your company’s past three years’ financial statements. For small businesses, business owners can choose whether or not they want to self-report this information. Just remember that accurate and up-to-date information can benefit your report.
Your business profile, which summarizes your business’ basic information, such as address, phone number, etc.
2. SIC & NAICS Industry Codes
You’ll also see that the business profile section on your business credit report has your company’s SIC and NAICS industry codes, which describe your business’ industry type. It’s important to have the correct codes because different industries have different credit risk classifications. Companies in higher risk classifications might have a harder time obtaining the proper insurance, among other things.
The five highest-risk SIC classifications are:
- Real estate investing and other types of investing
- Car sales
- Travel/transportation industry
- Money lending/collecting
If you’ve been misclassified, you can update your business profile on the agency’s website or by contacting the agency directly. Industry codes are received through public record data such as responses to Census surveys or administrative records, so make sure you correctly identify your business on such records going forward.
3. Trade Payment History
The payment history section of your business credit report shows your payment history for the past two to three years. Generally, the payment history section includes payments made to vendors. Included with each payment is the date of sale, the amount of the sale, payment terms, and the payment date.
This shows a summary of your tradeline experiences, broken down by the supplier category.
4. Commercial Financial History
The commercial financial history section of your business credit report tracks your payment history to creditors, lenders, and insurers. For example, any payments made on a business loan, insurance policy, line of credit, or equipment lease will show up here.
Included in the section is financing activity such as the amount of credit you’ve received from lenders, the type of the product, the term of the loan or policy, as well as the original balance and remaining balance. When you’re shopping for a loan or working capital, lenders will most likely use this section when making an assessment of your application.
5. Legal Filings, Bankruptcies, & Collections
The legal filings, bankruptcies, and collections section of your business credit report is used to assess your business’ liquidity and financial health. Specifically, the section will report on UCC filings for the past five years, which are liens placed on your business’ assets to serve as collateral on a loan.
The business report will also show other legal filings, such as business bankruptcy judgments, tax liens, and accounts that have been placed into collections, typically after 90 days delinquent. Having legal judgments against you or overdue accounts can reveal financial distress and make creditors hesitate to work with you.
These sections of your credit report are used to assess your business’ liquidity and financial health, and will report on UCC filings for the past five years.
6. Business Credit Score
Based on the information in your small business credit report, each business credit agency will issue your business a score that predicts payment behavior. How business credit scores work and what counts as a “good score” depend on the bureau, as they all have their own credit ranges.
Generally, business scores range from 0 – 100, with the exception of the FICO SBSS, which ranges from 0 – 300. Scores of 100 and 300, for FICO, represent that delinquent payments are the least likely to happen.
This is a summary of the key factors relating to the creditworthiness of your business. It is shown as your business credit score.
How to Maintain & Improve Your Credit Score
You can check your credit score to understand how to build business credit and specifically identify areas for improvement. After reviewing your business credit check, you can then make those changes and see how your score changed the next time you check it.
- Separate business and personal finances: By having separate bank accounts, you can maximize your business credit score. If you have an unexpected financial event in your personal life, it won’t affect your business credit score.
- Get a business credit card, line of credit, or lease: The easiest way to build your business credit score is to borrow money and repay it on time. A good first step is to use a business credit card for business expenses and pay it back in full every month. You can search and compare credit cards through our credit card marketplace.
- Choose your supplier and lenders with an eye to your business credit: Lenders aren’t required to report to business credit agencies. With that in mind, if you have a strong payment history, it’s worth asking your lender if they can start reporting.
- Pay your bills on time or in advance: To maximize your business credit score, you must pay all your creditors and lenders on time. Your payment history is one of the most important factors of your business credit score.
- Don’t use too much credit: Pay attention to your credit utilization ratio, which is a comparison of your credit balance and your available credit limit. The less credit you use of your total available credit, the better your credit score will be.
- Fix errors on your business credit report: Unlike your personal credit report, each business credit bureau has its own way to dispute errors. Disputes on your report can take up to one month to fix with the right documents.
- Check your credit score regularly: It’s extremely important to check on your credit score and ensure it’s accurate at least once a quarter. This is a good opportunity to learn how your financial decisions have impacted your credit score.
Most Businesses Have a Business Credit Report
Most small businesses already have a business credit report. If you’ve established an EIN, a DUNS number, applied for trade credit, or applied for an SBA loan or a business loan from a traditional bank, you likely already have a business credit profile on record. Keep in mind that your credit report may already exist from a vendor or supplier reporting to one of the credit reporting agencies.
Small businesses likely have a credit report if:
- They have an EIN: Your employee identification number (EIN) is like the SSN for your business, which allows the IRS to identify your business as its own entity. If your business doesn’t have an EIN yet, you can apply online.
- They have a DUNS number: If you already have the nine-digit DUNS number, this means you can easily access your D&B credit report through their website.
- They’ve established trade credit: Businesses establish trade credit when they agree with another business to purchase goods without paying cash upfront. This type of information is collected and reported by credit reporting agencies.
- They’ve applied for a business loan: If you’re applying for an SBA loan or a loan from a traditional bank, you will need a business report because the FICO SBSS credit score is generally used for qualifying.
Many business owners don’t know if they have a credit report tied to their business. Even for those that know they have a credit report, some of them have never actually seen it. In fact, I spoke with Jay DesMarteau, Head of Small Business Banking at TD Bank, who told me that:
“TD bank recently asked 550 small businesses earning $1 million or less about their credit practices. The survey found that as many as 69% of small business owners believe that they don’t already have a credit report, which they do. Further, only 15% of respondents had actually seen their business credit reports.”
Frequently Asked Questions (FAQs) About Business Credit Reports
We covered a lot of key pieces information about your business report and what you can expect to see. Some questions are asked more often than others, and we address those here. If you have any other questions, visit the Fit Small Business Forum or comment on the article below, and we will provide an answer.
How Can I Get a Business Credit Check?
To get a business credit check, all you need is the name of your business and the address. You can provide this information to one of the main credit bureaus to pull your credit. This means that anyone can get a business’ credit report as long as they have this information.
How Much Does It Cost to Search for a Business Credit Report?
Searching to see if a small business credit report exists is totally free. You won’t have to pay until you decide you want to get the full, in-depth report.
How Do I Get a Free Business Credit Report?
Unlike personal credit reports, you aren’t entitled to a free business report each year. A business report must be purchased through one of the main credit bureaus or an online credit platform like Nav. However, Nav does offer two free summaries of your business reports, which may get you the information you need.
A business credit report compiles information to assess the creditworthiness of a company. It will generally summarize a company’s structure, industry, payment history, and historical financial performance. Business credit reports are important because they, unlike personal credit reports, can be seen by anyone, including your vendors, creditors, lenders, and partners.
Nav is an online company that gives instant access to your business and personal credit reports. They offer two free summaries of your business reports and also offer full business reports starting at $24.99.
About the Author
Jordan Tarver is a junior staff writer at Fit Small Business focusing on credit cards and bank accounts. Jordan brings over two years of experience in account management and price analysis in the mortgage industry to Fit Small Business. He is also an accomplished self-published author.
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