Your business credit score is an important part of your overall financial health. Your score is used by lenders to determine the loan amount. Like consumer credit scores that are standardized, business credit scores vary from bureau to bureau. This means you cannot rely on one credit bureau to provide accurate credit scores.
Equifax
Equifax, which has been providing credit scores since 1996, now offers reports to consumers. These reports include public records, 12-month payments history, comments from previous credit grantors, and other information. These reports can be used by consumers to request credit or set credit limits. These reports are also helpful for businesses, as they help them track their financial health.
Equifax gives companies two different scores: a credit risk score or a business failure score. The credit risk score measures how credit-worthy a company. It ranges between one to nine hundred. 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
A company's Experian Credit Score is a number ranging from one to one hundred. It is calculated by a risk factor such as defaults and late payments. A lower number indicates a greater risk. Experian uses over 800 variables to calculate the score. These include information obtained from credit card companies and legal filings. It also uses information from public records as well as demographic information. Lenders are more likely to consider high-risk companies with scores greater than ten. Businesses with scores between ten and fifty-five are considered low-risk. A score between 76-100 and seventy-five-one hundred indicates low-to moderate risk.
Your Experian credit score is a key indicator of whether you will be approved for a loan. A high score will be likely to get approved for the loan or credit that you apply for. Conversely, a low score might result in loan rejection.
TransUnion
TransUnion, a credit score company, provides free credit reports to all consumers each year. It also offers credit monitoring services and insurance that protects against identity theft. However, it has been accused by deceptive market practices. It should be noted that this does not make the company a bad business.
TransUnion has its own algorithm for calculating credit scores. This is a reflection of TransUnion's credibility and ability to assess risk. TransUnion credit scores cannot be relied on by consumers to make decisions regarding auto loans, mortgages, credit cards or other financial products. Rather, they should carefully monitor their credit reports to avoid making mistakes that can damage their credit scores.
Experian Business Longevity
Experian is the largest global information provider. Experian assists businesses in implementing successful customer relations management, marketing, and risk management strategies. The Experian business longevity report provides a summary of a company's credit history and predicts its risk of delinquency in the next 12 months.
Experian Intelliscore Plus
Experian Intelliscore Plus will give you a credit score for you business. The model uses over 800 owner and company data points to create a single score. Experian's proprietary formula determines how the scores are calculated. While it is impossible that you know all the factors that impact your business score and how they affect your score, you can still use the data to make informed decision. Your payment history plays a major role in your score. 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. Intelliscore, which is a reliable indicator that your business may default on its payment obligations, is preferred by many lenders. The score is a combination o of current payment status, percentages of delinquent accounts, overall trade balance, and the percentage of defaulted accounts.