Credit score basics for small businesses

October 31, 2023 | 5 minute readEn español

At some point — whether you’re in growth mode or well established — every business needs to borrow money or ask suppliers for credit. To secure the credit you need at the most attractive interest rates, it helps to have a strong business credit score, which is a measure of the financial health of your company. This rating will help potential lenders, suppliers and financial institutions assess your business’s creditworthiness — how likely the business is to pay its bills on time — which affects how much credit they’re willing to offer. “Monitoring and managing your business credit score is an essential task for all business owners,” says Rob Pascal, Chief Digital executive with Bank of America.


Are business and personal credit scores different?

Your business credit score measures the health of your company by tracking how you manage its accounts, while your personal credit score reflects your personal payment history. Lenders sometimes look at both credit scores in tandem to evaluate a small business owner’s creditworthiness.


How business credit is scored

Several credit reporting agencies — including Dun & Bradstreet, Equifax and Experian — track business credit scores, each with its own scoring methodologies. Generally, business credit scores range from 1 to 100, though that’s not always the case.


Scores that may be used to evaluate your business’s creditworthiness include:



How personal credit is scored

In contrast, personal credit scores from the major credit bureaus such as Equifax, Experian and TransUnion generally follow one of two standardized scoring models: FICO and VantageScore. These systems each weigh factors such as your payment history and how much of your available credit you are using. Personal credit scores typically range from 300 to 850.


Alternative measures of creditworthiness

Other business credit scores measure the likelihood of delinquent payments. The Equifax Business Credit Risk Score, which predicts the chance of a business making a severely delinquent payment (90 days past due) or a charge-off (a debt deemed unlikely to be collected), issues ratings ranging from 101 to 992. The D&B Delinquency Predictor Score indicates the likelihood of a severely delinquent payment or the business shutting down without paying all of its creditors over the next 12 months. Scores range from 101 to 670.


Factors that determine your business credit score

Credit bureaus typically collect a business’s payment history from sources such as vendors, banks and business credit card issuers. They use this information to gather insight into your company’s annual revenue, expenses and number of employees, whether the bills are paid on time, and how much credit is available to the business on lines of credit and credit cards.


Credit bureaus also search public records, taking into account bankruptcies, tax liens and other information that may offer insight into your business’s ability to pay bills on time.


How to raise your business’s credit score

  • Establish trade credit accounts — meaning those where a vendor is willing to give you “terms,” such as paying in 30 days. One good place to start is at big-box office supply and home improvement stores.

  • Encourage your vendors and suppliers to report your positive payment history to the credit bureaus. Start with larger businesses, which are more likely to be set up as “furnishers” of this information to major credit bureaus.

  • Pay bills on time or early. This can also help improve your credit profile, but be sure to keep in mind your ongoing cash flow needs.

  • Make sure you don’t max out your business credit. Many experts recommend keeping credit utilization — the percentage of your available credit you use — to 30% or less. High credit utilization will lower your credit score. 


What if your business’s credit score isn’t being tracked?

Sometimes it may take a few months or more for credit bureaus to start tracking your business. Generally, businesses don’t have to register with credit bureaus to get tracked. The exception is Dun & Bradstreet, where businesses may apply for a free D-U-N-S® number — a unique nine-digit identifier — through Dun & Bradstreet’s website.


Lenders typically don't consider a small business’s credit history to be established until it has a mixture of business credit cards, fully paid off loans and “trade credit” accounts.


It may be helpful, when it is appropriate, to form a business entity such as a partnership, LLC or corporation to help establish your business as a trackable entity for credit bureaus. Also, apply for a federal Employer Identification Number (EIN) for your business from the IRS, open a business bank account and obtain a business credit card with the company’s legal name. “All that helps to establish a distinct business credit profile,” Pascal says.


Read more:Why and how to keep your personal and business finances separate


What if you spot an error?

Keeping an eye on your business’s credit score regularly and reviewing credit reports for accuracy and discrepancies will help you track your progress. All major credit bureaus offer programs that enable you to check your scores. Some are free and some are available for a fee. If you spot an error, contact the credit bureau that reported it to file a dispute.


There are opportunities to build your business credit score every day. Building a positive credit history can help position your business for whatever the future has in store.

Important Disclosures and Information

Access to Dun & Bradstreet business credit score information in Business Advantage 360, our small business online banking platform, is solely for educational purposes and available only to U.S.-based Bank of America, N.A. Small Business clients with an open and active Small Business account, who have a Dun & Bradstreet business credit score and have properly enrolled to access this information through Business Advantage 360 using a small business online banking ID. Only the Business Advantage 360 account owner is eligible to enroll; Administrators or sub-users are excluded. This information is not accessible through Mobile Banking. Dun & Bradstreet's business credit score (also known as “The D&B® Delinquency Predictor Score”) is based on data from Dun & Bradstreet and may be different from other business credit scores. Dun & Bradstreet is a third party not affiliated with Bank of America and Bank of America makes no representation or warranty related to Dun & Bradstreet's business credit score.

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