Your business credit score plays a significant role in your financial health. Lenders use your score when you apply for a loan. They then determine the amount you will have to pay. 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 has been in the credit score business since 1996 and now provides reports to consumers. 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. These reports are also helpful for businesses, as they help them track their financial health.
Equifax provides two different scores to companies: a score for credit risk and a score for business failure. The credit risk score, which is between one and nine hundred, indicates how credit-worthy a company. The business failure score, on the other hand, is a number between one thousand and is based on how likely a company will fail within the next 12 months.
Experian
An Experian credit score, which is used to measure a business' risk for defaults and delinquent payments, can range from one to 100. A higher number signifies a lower risk. Experian calculates the score by using over 800 variables. These include information from legal documents and credit card companies. It also uses information from public records as well as 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 and 100 is considered low-to-medium-risk, while a score between seventy-five and one hundred is considered to be good.
Your Experian credit score could determine whether you get approved for a loan. 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, a credit score company, provides free credit reports to all consumers each 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's credit scoring algorithm is its own. This reflects the trust and expertise of TransUnion in assessing risk. TransUnion credit scores shouldn't be used solely to help consumers make decisions about auto, mortgage, and credit card purchases. Rather, they should carefully monitor their credit reports to avoid making mistakes that can damage their credit scores.
Experian Business Longevity
Experian ranks among the top information providers worldwide. Experian provides support to businesses with successful customer management, marketing, risk management, and customer relationships 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 can help you determine your credit score. The Experian Intelliscore Plus model takes over 800 points of data from business owners to calculate one score. Experian's proprietary formula determines how the scores are calculated. Although it is impossible for you to determine exactly what factors affect your score, the data can help you make informed decisions. Your payment history is an important factor in your score. Avoid late payments and delinquent accounts to increase your score.
Your credit score is essential for getting a loan. Because it provides a reliable indicator about the likelihood that your company will default on its payments, many lenders prefer the Intelliscore. The score is a combination o of current payment status, percentages of delinquent accounts, overall trade balance, and the percentage of defaulted accounts.