![]() ![]() The overall goal of assessing financial risk in some way remains the same, however.) How Can You Check A Business Credit Score?Īny business or individual can check a business’s credit score, and they don’t need the business’s permission to do so. (Some of the other scores have different ranges, and a lower number is sometimes better than a higher one with these scores. The specific scores that Experian and other agencies provide vary from this, but the concept of a general score combined with more specific ones is consistent across most agencies. When considered altogether, the general Paydex Score and more specific scores give a fairly detailed picture of a business’s financial situation. Other scores include the agency’s Delinquency Predicator Score (risk of late payment or failure of payment), Failure Score (risk of bankruptcy or other financial stress in the next 12 months) and Supplier Evaluation Risk Rating (risk of supplier pause or shutdown in next 12 months). The general Paydex Score can be considered alongside other scores from D&B. The Paydex Score measures how well a business has met its past payment obligations, and this past performance can theoretically be used to estimate how well the business might meet payment obligations in the future. The agency refers to its score as the Dun & Bradstreet Paydex Score. The D&B business credit score also demonstrates how the single credit score can be placed within a larger contact to gain more insight. The Dun & Bradstreet business credit scores and ratings are often favored by commercial lenders, for this agency specifically assesses business credit risk (and not so much personal risk). (The FICO Liquid Credit Score is unique among company credit scores, for it ranges between 0 and 300.) D&B Paydex Score as an Example Both agencies provide a score that ranges between 0 and 100, and this score is set within a larger context that provides additional details about a company’s financial state. ![]() Three of the major company credit score reporting agencies are FICO, Experian and Dun & Bradstreet. Lenders and other parties might pull a credit score from any company that provides them, but lenders generally stick to one of the major credit reporting agencies. This is less often done within commercial real estate, however, because loans can be much larger than what individuals are able to guarantee.) 3 of the Major Business Credit ScoresĪll credit scores are calculated by private companies that specialize in the work. (Sometimes owners of new businesses will use their personal credit score to guarantee a commercial loan for their new business, which might not yet have an established credit score. The scales work essentially the same despite having different ranges - a higher credit score is always better regardless of whether it’s personal or business. Personal scores can be anywhere from 350 to 800, whereas business credit scores go from 0 to 100. One of the biggest differences between the two is the range that scores run. Business credit scores are simply used for commercial purposes rather than personal ones. The way business credit scores are used to assess company financial risk is much like how personal credit scores are used to assess individual financial risk. The two have both points of similarity and points of difference. Most people are more familiar with personal credit scores than business ones. Having a higher score sometimes qualifies investors for lower interest rates or more favorable terms. Of course, commercial real estate investors, developers and managers all must meet minimum credit score requirements in order to secure financing. Landlords may also give preference to tenants that have higher scores, because they present less risk. Landlords may want tenants to have a minimum score so that the risk of nonpayment or vacancy (should a tenant go financially fail) is minimal. Within commercial real estate, business credit scores are often used to assess tenant stability. Partners, suppliers, landlords and others likewise consider business credit scores for various reasons. Most obviously, lenders consider a company’s business credit score when approving and underwriting commercial loans. Knowing a business’s financial reliability/risk is helpful in multiple situations. Put negatively, a company’s business credit score represents the risk that the company will pay late, default or otherwise not meet financial obligations. The purpose of a business financial score is to help various parties assess the financial reliability of a company.
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