Your Business Credit Score
Does your business have its own credit score? You bet your sweet EIN it does!
While your personal credit score is tied to your Social Security number, your business credit score is tied to an Employer Identification Number — or EIN. This helps you keep your personal financial information private while you build and maintain your business credit score.
Why is it important to know your business credit score?
Having a higher business credit score makes financing more accessible & lowers the interest rate on borrowing. You may avoid being required to sign a personal guarantee that makes you personally liable. It can also help lower your insurance premiums for Workers Compensation, General Liability, Property Insurance, Professional Liability, D&O and Cyber Insurance.
How is your business credit score determined?
Payment History - This carries the most weight, typically accounting for 35-40% of your score. Consistently paying suppliers, lenders, and other creditors on time demonstrates reliability and financial responsibility.
Credit Utilization - How much of your available credit you’re using matters significantly. Keeping utilization below 30% of your credit limits shows you’re not overextending your business financially.
Length of Credit History - Established credit relationships over time build credibility. Older accounts with good payment patterns strengthen your profile, while new businesses may struggle initially due to limited history.
Credit Mix - Having diverse types of credit (business credit cards, term loans, lines of credit, trade credit) shows you can manage various financial obligations effectively.
Company Size and Revenue - Larger, more established businesses with steady revenue streams typically receive higher scores, as they’re viewed as lower risk by creditors.
Public Records - Bankruptcies, liens, judgments, or other legal issues can severely damage your business credit score and remain on your report for years.
Trade References - Relationships with suppliers and vendors who report payment behavior to credit bureaus help establish your creditworthiness, especially for newer businesses.
Personal Credit Connection - For smaller businesses, the owner’s personal credit may influence business credit decisions, particularly when personal guarantees are required.
The specific weighting of these factors can vary between different credit scoring models (Dun & Bradstreet, Experian, Equifax), but payment history and credit utilization consistently rank as the top priorities across all systems.
