A business credit bureau monitors businesses. The corporate credit reporting agencies collect data from a variety of sources, including information from lenders about payment history and information from other creditors, such as suppliers.
There are three major corporate credit bureaus, plus a few others. The bureaus also collect information from corporate credit reporting bureaus about bankruptcies, liens and judgments involving companies. They get that information from public records.
As you know, information about a company’s financial stability is only as good as the data it provides. You should check your business credit report at least once a year.
What is a credit report and score?
The information about a company is bundled in a business credit report. A business credit score is assigned based on the business credit report. The business credit risk score has a rating that ranges from poor (corporate failure score) to excellent. Anything over 670 is good.
Business credit reports are the basis for the business credit score, which is used to assess a company’s creditworthiness.
How Long Does Information Affect a Business Credit Report?
Certain information affects business credit reports over a long period of time, affecting business credit scores issued by credit bureaus:Judgments – 6 years and 9 monthsBankruptcies – 9 years and 9 monthsTax lien – 6 years and 9 monthsTrade records – 36 monthsPayment history – For the length of the loanFinancial statements – For the past 3 years
Why are business credit reports important?
Your business credit reports are prepared by a business credit bureau. They are important to you and to other companies.Your small business credit report directly affects your company’s credit score. Credit scores from good and above make it easier for you to get loans or get credit for purchases. When you get into the habit of checking your business credit reports, you can take action to resolve issues affecting your credit scores. These could be inaccuracies. Your small business credit reports can be viewed by other companies, such as merchants and suppliers. Good credit reports make it more likely that sellers and suppliers will do business with you. You can check who (which companies) viewed your small business credit reports.
Where does business credit information come from?
A number of data points can be bundled in your business credit file:public recordsvendorsvendorssupplierspublic utilitiesreal estate tax officesstate tax bureaucourt records with judgment court records with bankruptcy filings
Top Business Credit Reporting Agencies
Every credit reference agency has a focus. For example, your credit reporting agency FICO Small Business Scoring Service will record your personal credit score.
The big three corporate credit bureaus are Dun & Bradstreet, Equifax and Experian. Each of these business credit bureaus contains information from lenders, suppliers and vendors. Every business credit reporting agency uses the Small Business Finance Exchange Report (SBFE) to collect data.
Here are more details about the Big 3 and 2 other business credit bureaus and reporting agencies:
1. Dun & Bradstreet
Dun & Bradstreet’s business credit scores are a mainstay of business credit bureaus. Dun & Bradstreet’s corporate credit report uses an extensive corporate data focus on vendor and supplier transactions and other business-to-business data, which are key indicators of a company’s financial health. Dun & Bradstreet credit reports are viewed by potential business partners, lenders and other companies. Dun & Bradstreet credit scores are given a rating called Paydex score. The Paydex score is based on a compilation of information including the history of trade payments, outstanding business loans, payment habits of business loans and m
Equifax is another respected name in business credit bureaus with its Equifax business credit reports. Equifax Business Credit Scores are a compilation of reports from small business lenders and credit history data from lenders, as well as data related to liens, foreclosures, and judgments. As one of the big 3 corporate credit reporting bureaus, Equifax is a reliable commercial credit bureau.
Equifax | Credit bureau | Check your credit report and credit score
Experian’s business credit score is composed of lenders and trade data. The company works with 40 million companies and 300 million suppliers and lenders in the US alone. Business credit reports from Experian include a rating called Intelliscore Plus to create a business credit profile.
Check Your Free Credit Report and FICO® Score – Experian
TransUnion is another business credit reporting agency. TransUnion collects all transactions with credit and also uses public reporting data. The company aggregates the information and issues commercial credit reports, assigning a number that establishes a financial stability risk assessment.
5. FICO SBSS Score
The FICO Small Business Scoring Service is the only agency to provide personal credit scores. That makes it possible for an investor or supplier to view an entrepreneur’s personal credit reports, as well as the company’s financial obligations and credit reports. The FICO SBSS score is a number from 1 to 300. The rating is required by the SBA for loan applications and is also required by many other lenders.
Access your business credit report
Accessing your business credit information is easy. You can get free business credit reports on your own business once a year. But you typically have to pay a fee to get more than one report on your own company per year or to get a report on another company.
Just go to Annual Credit Report.
Can you run a credit report on a business?
Yes, and it is a common practice used by a company that issues business credit accounts. Before granting credit to a supplier or seller, a small business must assess any business risk by obtaining a company’s credit report. If a company does not have a strong business credit rating of at least Good, a business owner can set a credit limit or choose not to do business with the company.
Read more: How to get a business loan with bad credit?
Does an LLC Have Its Own Credit Score?
Yes. Whichever entity is chosen for the business structure, it will have a credit score. A corporation, LLC and other corporations have a credit score.
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