Business Credit Score

The business credit score will help banks and other lending institutions approve or deny credit as well as determining the level of interest to be paid on all new business loans. The higher the business credit score, the lower the interest rate. The lower the business credit score, the harder it will be for that business to get credit, especially at favorable market rates.

Business will have to self-monitor their business credit score just like consumers have to keep a close watch on their personal financial credit score. If there are bad debts or former bankruptcies on their business credit files they will have to take action or run the risk of being turned for future credit requests. Having a good business credit score will be an important factor that will need their personal attention.

Some banks and other lending institutions have long had their own business credit scoring systems to rank their business customers and to determine the appropriate level of interest rate to charge them for business loans. What the new business credit score does is to standardize all of those separate grading systems into one massive database that is reported on by major credit reporting agencies and made much more public than the old system.

Dun and Bradstreet will continue to collect additional information on businesses including their payment history, through its Paydex system, and other data that they feel is useful to determining a business's financial health. They bundle these up as company reports and sell them to banks and lending institutions so that they can evaluate business credit requests. Combined with the business credit score they are now much more confident in profiling not only a business's past credit record but in predicting their future patterns and trends.

To access your business credit score you simply have to contact one of the major credit reporting agencies. To access another business score you will usually need their permission. Information about how to contact any of the major credit reporting agencies as well as some smaller local and regional agencies is readily available on the Internet or in your local phone directory.