The business credit score is a primary thing to know about any company you are planning to do business with. In order to do that, you should first purchase a business credit report by following three simple steps mentioned below:-
Visit credit bureau’s website: - There are three different credit bureaus that compile data on business’ credit history: Dun & Bradstreet, Experian, and Equifax. You can take help of any of these to get a business credit score of the desired company.
Conduct a search: After visiting the credit bureau’s website, your next step is to find a company whose credit history you want to search. To search, all you need is the company’s name, along with the state and the country where they conduct their business. The Dun & Bradstreet website searches for the company’s D-U-N-S number. It is an identification number that keeps the track of businesses. You can find the D-U-N-S number on the basis of company’s name and the place where it is operational. While on the Equifax and Experian website, you can check the credit history of the business by its name and address.
Make a purchase: Once you get the credit report of a company you are planning to do business with, all you are left to do is to purchase a report. While there are levels of details with respect to reports that you can obtain from bureaus, listed below is the price of the basic credit report as of 8-2016 of different credit bureau website:
- On Dun & Bradstreet website, the basic business credit report costs $61.99.
- On Equifax, the basic report costs $99.99
- And on Experian website, the cost of basic report is $39.95
- The PAYDEX score determines whether or not the company pays on time, based on the history of on-time payment. It is calculated from 100 to 1, with 100 being the best score and 1 being the worst.
- Credit score, however, predicts the future payments based on the payment history and comparison from other companies dealing with the same. It ranges from 1-5 with 1 being the worst and 5 the best.
- The financial stress score predicts the likelihood of severe financial difficulties in the next year. It ranges from 1-5 and is based on the net worth of the company, the proportion of on time payment, legal action taken against the company and the current debt on the company.
- On top of it, Dun & Bradstreet also suggest how much credit should be extended, and how risky it would be.
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Equifax business credit score offers three different assessments for businesses
- The payment index: the payment index is similar to Dun & Bradstreet’s PAYDEX score. It determines the history of online payments.
- The credit risk score: It calculates the risk of the business becoming delinquent on payment based on company size, the utilized credit limit, the age of the account, etc.
- Business failure score: It measures the likelihood of your closing. It is calculated on the basis of credit utilized relative to the business credit limits, age of the oldest credit accounts and number of delinquent or late financial accounts.
Understanding an Experian business credit score
An Experian business credit report calculates age and size of the company deeply as compared to other business credit rating bureaus.
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