Your business credit score plays a significant role in your financial health. Lenders will use your score to determine how much loan you will be able to repay. The business credit score is not the same as consumer credit scores and can differ from one bureau or another. In other words, you cannot depend on one credit bureau in order to get 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 payment history, and comments made by previous credit grantors. These reports can also be used by consumers to set credit limits and apply for credit. The information contained in these reports is also useful for businesses as it helps them keep track of their financial health.
Equifax has two different scores for companies: a credit risk score and a business failure score. The credit risk score can be a number from one to ninety-nine hundred. This indicates how creditworthy 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 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 uses more than 800 variables to calculate the score. These include information derived from legal filings or credit card companies. It also includes information from public files and demographic information. Lenders may consider businesses with a score between 1 and 10 high-risk. Businesses with a score between 11 to 50-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 credit score is likely to get you approved for the loan/credit you apply for. However, a low score could result in loan rejection.
TransUnion
TransUnion provides consumers with a free credit score every year. TransUnion also offers credit monitoring and insurance to protect consumers against identity theft. However, the company has been accused in deceptive marketing practices. This does not mean that the company is a bad business.
TransUnion has its own algorithm for calculating credit scores. This reflects its credibility and expertise in assessing risk. TransUnion credit scores shouldn't be used solely to help consumers make decisions about auto, mortgage, and credit card purchases. 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 largest global 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 is a tool that can provide a business credit score. This model pulls in over 800 owners and company data points to produce a single score. Experian's proprietary formula determines how the scores are calculated. Even though it's impossible to know what factors have an impact on your score as a business owner, you can make informed decisions based on the data. One of the most important factors in your score is your payment history. You can improve your score by avoiding late payments or delinquent transactions.
An important aspect of getting a loan is establishing a credit score for your company. The Intelliscore is preferred by many lenders as a reliable indicator of your likelihood of defaulting on your payments. The score is a combination o of current payment status, percentages of delinquent accounts, overall trade balance, and the percentage of defaulted accounts.