Dun & Bradstreet is the primary company used to evaluate business credit and issue a credit score known as Paydex.
There are also other companies that provide similar credit evaluation services to businesses based on their independent databases.
One of them is Equifax who offers a business scoring credit model knows as Equifax Small Business Enterprise/ Equifax Small Business Credit Risk Score.
Equifax, one of the three major consumer credit rating bureaus, is now providing business credit evaluations for over 22,000,000 small businesses and corporations to detect early signs of trouble by monitoring key customers, suppliers & partners.
Equifax’s model is designed for companies that provide goods and services to small businesses.
The score was created to enhance risk assessment throughout the account lifecycle by predicting the probability of a new or existing small business customer becoming seriously delinquent on supplier accounts, or bankrupt, within a 12 month period.
Credit scores range from 101-816 with a lower score indicating a higher risk for serious delinquency.
There are also four reason codes which indicate top factors that impact the credit score for a better understanding of risk.
Equifax does provide both consumer and business credit risk models, but there are considerable differences between the two.
What Business Credit Can Do For You
You want to protect your personal finances. But when you own a business this is very tough to do.
Most creditors and lenders require that you supply them with your own personal guarantee for anything you do for the business.
This means if anything were to go wrong at work, they come after your personal assets also.
What they don’t want you to know is that you CAN easily obtain money for your business without offering this personal guarantee.
Business is credit you obtain in your business name. You can be approved with no personal guarantee required.
Your profile is used to approve you, not your personal credit profile. So this means there is no personal guarantee and no personal credit check required.
Business credit is easier to qualify for than most consumer credit. And typically the approval limits are also higher.
So this doubles your borrowing ability, and still lowers your risk.
As you utilize you get approved for higher limits, and more unsecured credit with Visa and MasterCard.
This helps you have a security blanked in a time in need. And most importantly, you can use this credit without having any personal financial liability.
Your value, and borrowing power will be greatly improved the higher business score and borrowing potential your business has.