Understanding Business Credit Scores

A business credit score is a number that indicates your business's creditworthiness: Key Concepts • Ranges from 0-100 (unlike personal credit scores) • Multiple scoring models exist (Dun & Bradstreet, Experian, Equifax) • Separate from personal credit score • Used by lenders, vendors, and partners Major Credit Bureaus • Dun & Bradstreet Paydex Score (1-100) • Experian Intelliscore (1-100) • Equifax Business Credit Risk Score (101-992) • FICO SBSS Score (0-300) Score Interpretations • 80+ : Excellent credit risk • 50-79: Good credit risk • 30-49: Fair credit risk • Below 30: Poor credit risk

Various factors influence your business credit score: Payment History (40-50%) • Payment timing to vendors • Credit utilization • Account delinquencies • Collections or bankruptcies • Payment trends over time Business Information (20-30%) • Years in business • Industry risk level • Company size • Annual revenue • Public records Credit Utilization (15-25%) • Credit limit usage • Number of credit accounts • Types of credit • Recent credit inquiries • Credit mix diversity Public Records (10-15%) • Legal filings • Tax liens • Court judgments • Corporate filings • State licensing

Steps to establish and build strong business credit: Foundation Steps • Incorporate your business • Get an EIN number • Open business bank accounts • Establish business phone line • Create professional website Credit Building Strategies • Apply for business credit cards • Set up vendor credit accounts • Pay bills early or on time • Monitor credit reports • Maintain low credit utilization Best Practices • Separate personal/business finances • Document all transactions • Keep financial records updated • Build relationships with suppliers • Regularly review credit reports Common Mistakes to Avoid • Missing payments • Maxing out credit lines • Mixing personal/business expenses • Ignoring credit monitoring • Applying for too much credit at once

Strategies to monitor and improve your business credit: Monitoring Practices • Check reports quarterly • Subscribe to monitoring services • Track credit utilization • Review for errors • Monitor vendor reporting Improvement Strategies • Establish more trade lines • Increase credit limits • Resolve negative items • Maintain perfect payment history • Keep utilization under 30% Dispute Resolution • Review for inaccuracies • Gather supporting documents • Contact credit bureaus • Follow up regularly • Document all communications Long-term Maintenance • Set payment reminders • Automate bill payments • Regular financial reviews • Update business information • Maintain good supplier relationships