Your business credit score plays a significant role in your financial health. When you apply for a loan, lenders use your score to determine how much you will pay for the loan. The business credit score, unlike consumer credit scores is not standard and can vary from one bureau to the next. In other words, you cannot depend on one credit bureau in order to get accurate credit scores.
Equifax
Equifax is a credit score provider that has been around since 1996. These reports contain public records, 12-month history of payments, and comments by credit grantors in the past. These reports can be used by consumers to request credit or set credit limits. Businesses can also use the information in these reports to monitor their financial health.
Equifax provides two scores for companies: a Credit Risk Score and a Business Failure Score. The credit risk score is a number between one and nine hundred and indicates how well-credit-worthy a company is. 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. Higher risk means a higher score. Experian calculates the score by using over 800 variables. These include information derived from legal filings or credit card companies. 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 of 76 to 100 indicates low-to medium risk. A score of seventy five to one hundred is considered acceptable.
Your Experian credit score could determine whether you get approved for a loan. A high score is more likely to be approved for the loan/credit that you apply, while a lower score can lead to rejection.
TransUnion
TransUnion provides consumers with a free credit score every year. It also offers credit monitoring products and insurance that protects consumers from identity theft. But the company has been accused of deceptive marketing practices. This doesn't make the company a bad firm.
TransUnion's credit scoring algorithm is its own. This reflects TransUnion's expertise and credibility in assessing risk. TransUnion credit scores shouldn't be used solely to help consumers make decisions about auto, mortgage, and credit card purchases. To avoid damaging their credit scores, they should instead carefully review their credit reports.
Experian Business Lasting Vitality
Experian is one of the largest information providers in the world. The company assists businesses in developing successful customer relationship management, market and risk management strategies. Experian provides a summary on a company's credit history that predicts its risk to delinquency within the next 12months.
Experian Intelliscore Plus
If you're looking for a credit score for your business, you can use the Experian Intelliscore Plus. This model pulls in over 800 owners and company data points to produce a single score. The scores are calculated based on Experian's proprietary formula. Though it is impossible to know exactly which factors impact your business score, you can use the data to make informed decisions. Your payment history is one important aspect of your score. Your score will improve if you avoid late payments and delinquent account.
An important aspect of getting a loan is establishing a credit score for your company. Intelliscore is used by many lenders to determine the likelihood that your business will default. The score is calculated based on the current payment status, percentage delinquent accounts and total trade balance.