What is a Business Credit Report & How Do You Get One?

Similar to a personal credit report — but with some important difference, which we’ll cover in a moment — a business credit report provides prospective lenders, vendors, investors, suppliers, partners, and sometimes even customers (especially in large-scale or high-profile B2B or B2G transactions) with information about a business’s overall credit worthiness and/or trustworthiness. For example, some third parties may not necessarily care about a business’s credit history, but wants to get a sense of whether it has a track record of fulfilling its promises and meeting its commitments.

What Factors Comprise a Business Credit Report Score?

A variety of factors ultimately determine a specific business’s credit report score, including: payment history, length of credit history, company size, industry risk factors, credit utilization ratio, and public records (e.g. bankruptcy filings, civil judgements, etc.).

Key Difference Between Business Credit Report and Personal Credit Report

As noted above, there are some important differences between a business credit report score and a personal credit report. These include:

• Businesses are ranked by various rating firms and agencies on a scale of (usually) 1 to 100. There is no single industry standard and various algorithms are used, which makes things quite complicated.
  
• Third parties — like banks and credit card companies — can only access an individual’s personal credit report after receiving express consent (such as a signature on an application, etc.). However, a potentially significant amount of information about a business’s credit history is publicly available, which means virtually anyone or any organization can access it (either for free or by paying a fee).
  
• Many businesses are not even aware that they HAVE a credit report in the first place! As such, even if they have good or exceptional business credit, this may not be reflected in their report — because vendors and suppliers have not notified the credit bureaus.  

Where to Get a Business Credit Report

There are several sources that offer free business credit reports, including CreditSignal (by Dun & Bradstreet), Nav, CreditSafe and Scorely. However, as the old but wise saying goes: you get what you pay for. While business credit reports through these sources can be a good starting point, they typically don’t provide a complete, accurate picture. For that, businesses need to pay a fee, either to these sources or to a research/consulting firm (of which there are many).  

Obtaining Business Funding with a Low Credit Score

If you are under the impression that having a high business credit report score is essential for obtaining business funding — then think again! At National Business Capital, we do not believe that credit scores (personal or business) are the end-all-and-be-all of a borrower’s credit worthiness or trustworthiness. We take other factors into consideration, which is why our approval rating is around 90 percent — compared to big banks, where the approval rating plunges to around 15-20 percent.
To learn more, and discover why when banks typically say no we usually say yes, download our free eBook “How to Get Business Funding When Banks Say ‘No’” today: