What Your Business Credit Score Means

Did you know that if you use a business credit card for your company, that you have a business credit score? If you know what effects this score and can keep it high, you’ll have a much easier time whenever you need to apply for a new loan or credit card. Some of the numbers involved in business credit scores are a bit mysterious, and its worth understanding what they all mean.

The main difference between personal, or FICO, credit scores and business credit scores is that where a FICO score records the creditworthiness of an individual, a business score records the creditworthiness of an entire company.

However, here is where the differences start to accumulate. Fist, FICO scores tend to range between 300 and 850. On the other hand, business credit scores typically range between 0 to 100, so if you see your business score for the first time, don’t panic, because it’s just a different scale. Also, certain credit agencies report separate numbers that indicate business risk.

Another huge difference between personal and business scores is that personal scores follow a standardized procedure, but business credit doesn’t. This means that two different reporting agencies can report two slightly different scores, so don’t trust the first result that you see as being absolute.

You typically don’t have to worry about personal accounts having an effect on your business’ score, but sometimes, if your business is small enough, lending companies will assess both your personal and business credit score before deciding whether to accept your credit application.

Unfortunately, while you can get a free personal credit report once every year, you always have to pay to see your business credit score. While this is a hassle, it’s still worth knowing what lenders and creditors will see when they try to assess whether or not to extend lines of credit to your business.

Another key difference between the two types of scores is that while personal scores are private, business’ scores are public. As long as you pay, anyone can get any companies credit reports. This is of course another reason to always try to keep your business’ score high, so that you can always prove that you are credit and trustworthy.

The most important thing to remember about business’ credit scores is that sometimes reporting agencies are just wrong. If you think it’s wrong, don’t be afraid to settle the issue and correct it.

Keep your business’ score high and prove that lenders can trust you and your employees.