Business credit scores: A guide for small business owners

Business credit scores: A guide for small business owners

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A credit score is more than just an indication of your ability to pay bills on time—it is also an important benchmark of financial health.

Just like your ability to pay your credit card bills and mortgage payments on time factors into your personal credit score, your ability to handle your business’s debt and accounts payable, among other factors, all go into your business credit score.

Your company’s credit score can impact your company and future opportunities in a major way, so we’re outlining everything you need to know about building business credit and maintaining a healthy credit score.

What is a business credit score?

Establishing business credit refers to your ability to secure financing at agreeable terms. Your financial health and trustworthiness is measured by various factors that are summarized by a number called your credit score. Your credit history begins when you apply for an EIN with the IRS.

And what is a good business credit score? According to Experian, a credit reporting company, your score can be anywhere from 0–100. The higher the score, the better your credit. Generally you want to shoot for a score of 80 or above.

Beyond just this number, however, is a credit report that details your financial history and behaviors. Lenders, insurance companies, and other interested parties may consult your credit report to see any outstanding debts, collections, and history of late or on-time payments.

Credit reports are generated by business credit bureaus, notably Experian, Equifax, and Dun & Bradstreet.

Why do I need a business credit score?

A business credit score is used to determine how likely you are to pay your bills on time, and to indicate to lenders how big of a risk you might be. Your credit score is used to determine interest rates, what types of loans you can receive, how much you’ll qualify for, and how to construct repayment terms.

Additionally, other businesses may consider your business credit score as a factor to decide if they want to do business with you, or to negotiate a beneficial business contract.

Having poor business credit can hurt your opportunities for partnerships, growth, and beneficial terms on deals and loans. Your business credit score signals to economic partners whether it is safe and lucrative to do business with you.

Factors that may impact business credit scores

Your business credit score can be impacted by a number of factors, primarily:

  • How many years the company has been in business
  • How many lines of credit your business applied for (and/or opened) recently
  • Whether your business had any collections or liens in the last seven years
  • Your business’s payment history: how often you make late versus on-time payments

This score can also change over time. For example, if you’ve made many late payments in the past, but then you start making all payments on time (or even early), your score will gradually increase.

How business credit scores are used

A good business credit score can help you:

  • Secure financing
  • Get better interest rates and loan terms
  • Establish better trade deals within your industry

These factors help businesses save money, improve cash flow, seize opportunities as they come, and grow at a healthy rate. Additionally, building business credit using a business credit card can shift the financial focus from the business owner’s personal credit, which is often used to get a business up and running.

Generally, outside companies that work with your business might want to check your business credit score so they will know if you have a history of making payments on time. This can help them determine if they need your business to make payments up front, need to pay for goods and services in full upon receipt, or if they can give you a due date several months in the future. Some companies may even choose to monitor your business credit score on a monthly basis, so they can see if you are still making payments on time.

Establishing business credit for the first time

If you’re a small business owner who started your operation using your personal credit score—you’re not alone. It’s a common and useful beginning for small businesses, but it’s time to begin building business credit in the name of your company.

Make your business official: It’s time for a business name, dedicated phone number, business bank account, and credit profile. This means getting a phone number that is not an owner’s personal phone and registering it with the directory in your city, county, or state. Open a business bank account in your company’s name and begin using it to pay bills and vendors.

Get a business credit card: Knowing when to get a business credit card varies from business to business.Your credit file is initiated once you open a line of credit. For most businesses, the quickest and most useful way to achieve this step is to get a business credit card. Start with one, and consider adding one or two more as your need grows. You should always keep a manageable balance on the card and never miss a payment. Make sure to do some research on how to get a business credit card and consider the rewards or benefits each would offer your company.

Work with reporting suppliers: Not all suppliers and vendors are required to report payment histories to a credit bureau. Choosing to work with a supplier or vendor who does report these payment histories can help to establish business credit.

Get incorporated: Transitioning your business to an LLC helps to separate personal credit from your business credit. This can simultaneously improve both scores and protect you and your business.

The benefits of a good business credit score

A healthy business credit score opens many doors for your business, no matter how long you’ve been in business. Smart business owners understand that it’s well worth the time to establish business credit now as part of their total capital to continue strengthening their company.

The most important opportunity you’ll enjoy with a good business credit score is the ability to secure financing, especially at short notice. A good credit score can help you get loans, lines of credit, favorable terms on financing for large purchases, and much more trust from any seller.

Another opportunity you get as you begin building business credit is the ability to negotiate deals and trades. With your clean business credit report, you will be able to demonstrate your value to potential partners.

Many businesses find that building business credit allows them to negotiate favorable terms and establish important relationships with vendors and investors. That’s right–investors are going to be interested in your credit score, so you want to ensure you’re establishing healthy credit.

How is a business credit score calculated?

There are several credit score reporting bureaus that determine your score, including Dun & Bradstreet, Experian, and Equifax.


  • Credit score range: 350-850
  • Acceptable minimum for funding: 600
  • Excellent score: 800


  • Credit score range: 1-100
  • Acceptable minimum for funding: 50
  • Excellent score: 80+


  • Credit score range: 0-300
  • Acceptable minimum for funding: 140
  • Excellent score: 180


  • Credit score range: 1-100
  • Acceptable minimum for funding: 51
  • Excellent score: 76

Personal credit score

You may wonder, does business credit affect personal credit or vice versa? Many small and beginning businesses are created using the owner’s personal credit score. The personal credit score can impact the business and is linked until the business is officially separated and established as an LLC.

Many small businesses start out using the owner’s personal credit score to secure early financing, which is a necessary step. It’s recommended that you separate your business from personal credit as soon as you can to keep both pristine.

Established businesses with a low business credit score can sometimes rely on the business owner’s personal credit score for loans and lines of credit. A personal score will range from 350–850, and you can request one free credit report every year to check in on your status.

D&B Paydex Score

The D&B PAYDEX Score is reported by Dun & Bradstreet. It uses a scale of 1–100, with 100 being the best possible score. If you want to access your D&B PAYDEX Score, you’ll need both your EIN and your D-U-N-S number.

This credit report bureau places strong emphasis on paying bills on time, with extra credit given for bills that are made 30 days early. In fact, you can only receive a score higher than 80 if you make early payments.

FICO LiquidCredit Small Business Scoring Service

If you want a loan from the SBA (Small Business Administration), you should prioritize your FICO LiquidCredit Small Business Scoring Service (SBSS score) above the others. This is because the SBA requires a SBSS score to even consider your company for an SBA loan. SBA loans are often desirable because they can come with less required collateral and better interest rates.

The SBSS score ranges from 0–300, with 300 being a perfect score. Many lenders look for a minimum score of 160, but the SBA has a minimum of 140.

Experian Intelliscore

Experian’s Intelliscore assesses your risk for serious delinquency. The system uses a 1–100 scale, with 1 being the highest risk score and 100 being the lowest risk score. Basically, you want a high score because it means you are low risk.

The Intelliscore is determined by over commercial and owner variables including tradeline and collection information, recent credit inquiries, public filings, new account activity, key financial ratios and other performance indicators.

How do I check my business credit score?

In order to see your business credit scores you’ll need to check with the business credit reporting bureaus. For the D&B Paydex score you’ll need a D-U-N-S number in addition to your Employer Identification Number.

Your lender will calculate your FICO SBSS score based on a variety of factors such as age and size of business, and the scores available from other credit bureaus. You can find this score by working with an SBA-approved lender.

You can request a business credit report from Experian and Equifax. The report will show your score as well as the contributing factors that inform that score. You can usually request a report once a year, or you can ask to see the report when it’s pulled for financing by a vendor or lender.

Reasons to check your business credit score

It’s important to regularly check your business credit score so you can gain more insight into the financial health of your business. It’s a number that many vendors, lenders, and other companies will want to know so they can decide how risky it would be to work with you. It can also have an impact on the interest rates you pay for loans and lines of credit. If your score is low, you can work on gradually raising it.

How to improve your business credit score

You’ve worked hard for your business credit score—how can you make sure it stays strong? Once you’ve begun establishing business credit, you can take the following precautions to make sure your credit score stays healthy.

Monitor your business credit: If you notice an unexplained dip or new item on the credit report, address it directly. You’ll be able to catch identity theft, fraud, and other concerns much more rapidly before they affect your business’s future.

Dispute issues: Sometimes collections and missed payments are mistakenly recorded and show up on the credit report. If you believe they are in error, don’t hesitate to reach out and file a dispute. It could help you improve your business’s score and identify fraud.

Separate business & personal: Converting your small business to an LLC can help you separate your personal credit from the business, which can protect your business from any changes in personal credit that might negatively impact your ability to secure business financing.

Pay early: Set up all of your business accounts to auto-pay early, so you have time to catch any complications that could lead to a late payment. Not only does paying early help you avoid the late payment punishments, it also shows you are a reliable business owner. Paying early prevents hits to your score and actually improves your business credit score.

Manage business credit card use: Carefully monitor who has access to business credit within your company, and set enforceable budgets that keep you well within comfortable limits.
Your business credit score is well worth the time and effort it takes for establishing, monitoring, and improving. As you build business credit you will be able to seize the opportunities that come your way.

As part of our mission to make money smarter, BILL Spend & Expense reports customer credit performance to the Small Business Financial Exchange (SBFE®). That means you can use BILL Spend & Expense to build your business credit history and credit score for your business simply by paying on time. Learn how BILL can help build your credit or see for yourself and request a demo.

The information provided on this page does not, and is not intended to constitute legal or financial advice and is for general informational purposes only. The content is provided "as-is"; no representations are made that the content is error free.