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Understanding Your Business Credit Report

OPEN Insight American Express OPEN

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July 24, 2009

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“I've been told that D&B collects their ...”

Patrick Shearer

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Like your personal credit history, your company’s credit rating is determined by credit reporting agencies – independent companies that assess your credit “score” based on factors such as payment history and debt load.

However, your business credit ratings differ from personal credit ratings in that:

Your business score is based primarily on the timeliness of payments.

Unlike personal credit, having multiple active accounts can be a positive, provided that they are in good standing. It demonstrates that your business is savvy about managing its finances.

Some information in your business profile may be self-reported, which is typically not allowed on personal reports. You do this by establishing a profile with the credit bureau; consult their websites for details.

Business creditors are not required to report payments to the bureaus, so if you’re interested in building a good rating, ask vendors if they are willing to report your payment performance.

It is advisable, then, to obtain your company’s report from these agencies (see below) to check accuracy while gaining insight into how the credit reporting agencies portray your firm to potential lenders. When you review your credit reports, examine your:

Company profile: Check details for accuracy: business name and age, address, phone, industry, number of employees and incorporation status. Much of this information is “self-reported,” meaning the onus is on the business owner to ensure that the data is correct and up to date.

Credit rating: Note if your rating is strong, average, or poor. Reporting companies use different scoring methods, so their ratings might not be the same. If the report does not provide context for the score, consult the providers’ Web sites for details on how to interpret your numbers.

Payment history: Confirm that your payment history is accurate. Paying within the terms set by your suppliers may be the most direct way to drive a positive business credit rating. Look for trends that lenders might flag, like a change from paying in full each month to making minimum payments. Also, ensure that all supplier relationships are represented. If you’ve been making timely payments to a supplier or lender, it should be reflected in your profile. If it is not, you will need to contact the vendor to report your payment history with them.

Uniform Commercial Code (UCC) filings: This shows the liens and leases you have in place. View this information from a lender’s eye: Is it accurate? Could your company be perceived as over-extended?

D&B™ (Dun and Bradstreet)
Information sources: Business owner and vendor information
Scoring system: PAYDEX™ score based on payment experiences; DUNS Rating™ based on financial statements

Experian Business™
Information sources: Vendor information only
Scoring system: Intelliscore™ based on payment experiences

Equifax™ Business
Information sources: Public records, Payment histories,
Optional personal data of business principal, Bank and lease data
Scoring system: Small Business Credit Risk Score

(Note that there may be a charge for obtaining your company’s credit report; details are available on their websites or by calling them directly.)

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Related keywords

OPEN Insight, Article, financial planning, business credit, credit report

What do you think?

Join the conversation ( 2 )

Patrick Shearer 1 year 10 months and 15 days ago

I've been told that D&B collects their information from a preset universe of creditors, and doesn't accept positive or negative history from other sources. (I was told this from D&B when I tried to report a deadbeat tenant). If Amex isn't one of their sources, you may be out of luck.
MICHAEL PRYSLAK 2 years 1 months and 6 days ago

How do I get American Express to report my good credit history with my Open account to Dunn and Bradstreet? My business has a DUNS number, but repeated calls to American Express have failed to find someone who can answer this question.