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Good business credit is crucial to running your own business.
But what exactly constitutes a good business credit score? How do you know if you’re on track or what to do if you find that your score is lower than it needs to be?
In this guide, we’ll take a closer look at the various score ranges for each type of credit score and the right habits you need to cultivate to keep your score high.
What Is a Good PAYDEX Score?
No two business credit scores will necessarily be the same or influenced by the same factors. This is due to there being multiple business credit bureaus you can turn to if you want to look at your credit scores or your credit report.
One such option at your disposal is Dun & Bradstreet.
The Dun & Bradstreet PAYDEX Score features a score range of anywhere from 0 to 100. PAYDEX is typically used by vendors and suppliers to help them determine what level of risk you are and what terms to extend for trade credit (important for a business tradeline).
While other scores will take more factors into consideration, Dun & Bradstreet calculates your PAYDEX Score based on your payment history.
Here’s the breakdown of the different score types and what they mean in relation to your PAYDEX Score.
|100||Payment occurs 30 days before due date|
|90||Payment occurs 20 days before due date|
|80||Payment occurs on due date|
|70||Payment occurs 15 days after due date|
|60||Payment occurs 22 days after due date|
|50||Payment occurs 30 days after due date|
|40||Payment occurs 60 days after due date|
|30||Payment occurs 90 days after due date|
|20||Payment occurs 120 days after due date|
|1-19||Payment occurs over 120 days after due date|
A good score or a “low risk” score is anywhere from 80 to 100, with 50 to 79 being medium risk and anything below it being high risk.
What Is a Good Intelliscore Plus Score?
Given Experian’s reputation in the consumer credit space, it stands to reason that they’re one of the authorities to consider if you need help understanding and boosting your business credit score.
Whereas Dun & Bradstreet’s credit score rating model is rather simplified, Experian’s involves several factors to determine your credit score.
Experian’s Intelliscore Plus takes into consideration your payment history, any negative factors available surrounding your business (bankruptcy, late payment trends, collections, etc.), and credit utilization.
Intelliscore Plus also features a score range between 1 to 100. Here’s the breakdown of Intelliscore Plus credit scores.
Intelliscore Plus Ranges
|Score Range||Risk Grade||Risk Description||Bad Rate|
|76 – 100||1||Low||1.7%|
|51 – 75||2||Low-Medium||4.4%|
|26 – 50||3||Medium||10.0%|
|11 – 25||4||Medium-High||19.1%|
|1 – 10||5||High||50.8%|
What Is a Good Equifax Business Delinquency Financial Score?
Some business credit bureaus have more unique reporting systems that are designed to assess a business’s risk of failure or delinquency.
An excellent example of this is Equifax.
Rather than giving business owners like yourself a business credit score, they’re focused on two distinct offerings: the Equifax Business Delinquency Score and the Equifax Business Delinquency Financial Score.
The Business Delinquency Score predicts the probability of a severe delinquency on a vendor or supplier account.
And the Equifax Business Delinquency Financial Score predicts the probability of a severe delinquency on financial accounts.
It also has a score range between 101 to 650. The higher the score is, the better your current financial situation. Let’s take a look at the breakdown of the Equifax Business Delinquency Financial Score.
Equifax Business Delinquency Finances Score Ranges
|Score Range||Risk Grade||Risk Description||Bad Rate|
|585 – 650||1||Low||0.57%|
|554 – 584||2||Low-Moderate||0.98%|
|465 – 553||3||Moderate||3.93%|
|299 – 464||4||Medium-High||21.2%|
|101 – 298||5||High||75.3%|
What Is a Good PayNet MasterScore?
The three business credit bureaus listed above are top-recommended, reputable agencies if you wish to know your score.
However, they’re not your only options.
One alternative is the PayNet MasterScore.
PayNet MasterScore is a complex scoring system designed to help creditors make improved, automated decisions when choosing who to lend their money to.
Unlike many of the other credit scoring systems in this guide, PayNet’s MasterScore isn’t as easy to break down.
PayNet calculates MasterScores (which range from 500 to 800) using over 587 variables, of which 135 are unique. The system itself was built using three million transactions and 135,000 defaults.
Rather than just one scorecard, there are 29 scorecards in all which are based on factors like the size of the company, age, or even the industry that it operates in.
PayNet’s credit offerings are much different than other credit solutions you may come across. Here is the score breakdown for their PayNet MasterScore V2.
PayNet MasterScore V2 Scores
|Score Range||Risk Description||Bad Rate|
|700 – 800||Low||<1.1%|
|660 – 699||Low – Medium||Low to Medium|
|630 – 659||Medium||9.0% – 4.1%|
|590 – 629||Medium – High||21% – 9.1%|
|500 – 589||High||>21%|
What Is a Good FICO SBSS Score?
The FICO Small Business Scoring Service (SBSS) Score uses a unique blended model that considers both consumer and business credit to better determine whether or not businesses qualify for an SBA loan (specifically).
How is this done?
FICO SBSS Scores are calculated using the personal credit scores of up to five owners as well as their business’s credit score and standing.
We also won’t need a table here as there’s only a threshold that one needs to pass in order to secure an SBA loan with ease. FICO SBSS scores range from 0 to 300, and a minimum of 155 is required to pass the pre-screening process (160-165 is a good rule of thumb).
If you do have a FICO SBSS Score that falls below 155, your loan request will need to go through a manual screening in order to move on to the next step of the process.
Tips To Maintain A Good Business Credit Score
Now that you have a better understanding of how business credit scores are calculated, it’s crucial to know what you’re supposed to do with this information.
Getting your credit score is the first step. The next step is cultivating the habits that will allow you to build your score and maintain it over time.
Here are a few tips that will help you maintain and build a good business credit score moving forward.
Pay On Time Every Time
Paying late is, overall, a poor strategy. Not only are you putting your finances at risk, but you’re guaranteeing that these late payments are going to go on your credit report.
With a low score and poor payment history, it becomes that much harder to secure financing. No matter what, make it a priority to pay on time, every time.
If possible, you may even wish to consider making certain payments earlier than necessary.
Some credit scores will receive a bump as a result of this. Additionally, no vendor is going to complain should you pay off debts early. However, only make sure that you do this if you are able to so you don’t overextend your business financially.
Utilize Credit (But Don’t Overutilize It)
Credit utilization is an essential scoring factor in both personal and business credit. However, it’s one that requires tremendous planning and balance.
If you use too little credit (basically not using credit at all), it can impact your credit score negatively. If you use too much, the same goes.
Make sure to keep track of all your credit lines and keep your credit utilization below 30%. To determine your credit utilization, you simply divide the sum of all your credit balances by your credit limits.
As long as you do this and make sure to pay all of your debts on time, you should be golden!
Work With Vendors That Report
Learning how to build business credit is the only way to improve your credit score when you’re first starting out.
But where do you begin?
Working with vendors that report payments to major business credit bureaus can be a great way to get started. This helps you develop a positive payment history that will result in a gradually rising business credit score.
As with anything else in your business, make sure you shop around to understand which vendors in your industry report payment activity and which ones would be the best fit for your needs.
Separate Your Business And Personal Credit
With the exception of the FICO SBSS Score, your personal credit will not impact your business credit in any way.
Remember that your business is its own separate entity. You shouldn’t be mixing personal and business finances, and the same goes for your credit. Open separate credit accounts for your business and always pay these debts off with your business funds.
Always keep your business and personal finances separate.
Credit scores can be complicated to understand. When it comes to business credit scores that vary based on the reporting bureau, this statement becomes even more true.
Fortunately, breaking down what a good credit score is and how it’s calculated is simpler than many believe. If you want to know more about business credit scores and how to get yours to a desirable range, use the information above as you start learning more about business credit.
Dylan Buckley is a freelance finance writer and editor with 7 years of professional experience. Specializing in personal finance, cryptocurrency investments, and Fintech, Dylan is deeply passionate about creating content that helps readers make informed, confident financial decisions. He studied finance in college and maintains a credit score over 780.