XI. How Your Commercial Credit Scores Work

Your business has its own credit profile and score linked to your business EIN number. Three main business reporting agencies provide your business credit profile and score. They are: Dun & Bradstreet, Experian, and Equifax Commercial. A business credit score is a mathematical model. It depicts a business’s risk of going 90 days late on an account in the next 12 months. While consumer scores depict risk over a 24 month time frame.

A business credit score reflects the business’s likelihood of defaulting on an obligation, not the business owner’s. The business credit score comes from how business obligations are paid. It is not from how the business owners pays personal obligations.

Each reporting agency provides access to multiple business credit scores evaluating different forms of risk. FICO has its own business credit score to assess business risk. Banks have their own internal bank credit score, to determine business loan approvals. Credit issuers, lenders, suppliers, vendors and others which extend credit to businesses use these scores.

Your business credit scores are used every time you apply for credit and financing for your business. But lenders and credit issuers will not tell you this. And they will not tell you which scores they use to assess your business. There is no Fair Credit Reporting Act in the business world requiring them to, like there is in the consumer credit world.

Important: your business credit profile and scores are available to anyone who wants them. In the consumer world someone needs your permission to pull your consumer reports. This is what the FCRA calls “permissible purpose”. But with no FCRA in the business world, anyone who wants your reports can easily and cheaply get them. This includes competitors, prospects, clients, lenders, and more.