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The 3 Business Credit Bureaus: A Detailed Review
November 14, 2019
Credit Score Report - Business Bureaus

The 3 Business Credit Bureaus: A Detailed Review

Business credit bureaus evaluate the creditworthiness of your business and generate your business credit scores.

They collect information from a variety of sources such as public records, UCC filings, and data furnishers to create their business credit reports. But, who exactly are the business credit bureaus that play such a vital role in the success of your business? Keep reading to find out.

Why Keep Up With Your Business Credit Reporting

If you’re a business owner, monitoring your business credit reports should be at the top of your to-do list. By doing so, you can better understand your business’s finances and if you need to make some operational and financial changes.

If you have a good business credit score, it’s more likely that you’ll get approved for a business loan or line of credit. This because you’ll likely be able to land a lower interest rate and favorable terms. In addition, you may get approved for larger amounts of financing and have an easier time landing affordable insurance coverage. 

On the other hand, if you have limited or poor business credit history, you’ll be motivated to establish business credit. You can do this by incorporating your business, obtaining a federal tax identification number, and opening a business credit card.  

Essentially, building your business credit profile can help you maintain and grow your business. 

The 3 Main Business Credit Bureaus

Just like there are three major consumer credit bureaus, Experian, Equifax, and TransUnion, there are three leading business credit bureaus. The three primary business credit bureaus are Dun & Bradstreet, Equifax Small Business Enterprise, and Experian Smart Business Reports. Below, we’ll dive deeper into how each business credit bureau evaluates your business credit.

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Dun & Bradstreet (D&B)

Dun & Bradstreet (D&B) is the oldest and most widely known business credit bureau. It’s sole focus is on business credit or how your business interacts with suppliers and vendors. Since potential suppliers will likely pull your D&B credit reports before offering you business credit terms, it’s essential to ensure your D&B credit profile is accurate.

D&B uses a Paydex score that ranges from zero to 100 and is based on payment data that is reported directly to them or provided by certain data-gathering providers. If you’d like to increase your Paydex score, you should work with suppliers and vendors that report positive payment history. Also, try to repay debts on time or even before they’re due. 

When you view a D&B credit report, you’ll see your commercial credit score, financial stress score, and a Paydex score. While your commercial credit score will predict how likely your business will be delinquent on bills within the next year, your financial stress score will predict how likely your business will fail over the next 12-month period. 

Equifax Small Business Enterprise

On an Equifax business credit report, you can expect to find three different assessments including your payment index, credit risk score and business failure score. Just like D&B’s Paydex score, Equifax’s payment index is on a scale of zero to 100 and indicates how many of payments your business has made on time. 

The business credit risk score evaluates how likely your business will become delinquent on payments. It considers the following:

  • Your business size.
  • The amount of available credit you have on revolving credit accounts.
  • How long it’s been since you’ve opened your oldest financial account.
  • Any evidence of non-financial transactions.

When it comes to the business failure score, Equifax looks at how likely your business will close within 12 months. Aside from a business credit report with three assessments, Equifax provides information that confirms your business does indeed exist. It verifies important information such as your tax ID number, the number of employees you hire, and your annual sales volume. 

Experian Smart Business Reports

Experian won’t compile a report on your business or produce a business credit score for you unless it has specific information on your business. This includes information such as at least one credit account or tradeline. Therefore, it’s a good idea to develop a relationship with a supplier or lender that reports to Experian.

When compared to Dun & Bradstreet’s Paydex score and Equifax’s payment index, Experian’s business credit scores are unique. They consider multiple factors instead of solely payment histories. 

Experian will review your outstanding loan balances, and whether or not there are any liens, judgments, and bankruptcies against your business. They’ll also consider the size and age of your business. It will use data from suppliers and lenders, legal filings, public records, and collection agencies to calculate your business credit score. 

The bureau uses the Intelliscore Plus model to assign business credit scores that range from 0 to 100. The higher your Experian credit score is, the more likely it is to secure favorable terms on loans and insurance.

Other Business Credit Bureaus To Note

While Dun & Bradstreet, Equifax Small Business Enterprise, and Experian Smart Business Reports are the three major business credit bureaus, there are other business credit bureaus out there. Here’s a brief overview of several of them.

  • Accurint by LexisNexis: LexisNexis’s Small Business Risk Score assesses credit risk for businesses that lack established credit lines.
  • net: Credit.net offers credit information on more than 15.5 million businesses across the United States and Canada.
  • Global Credit Services: Global Credit Services generates reports for over 20 million public and private companies. Their data is compiled from public records, financial statements, stock prices, and SEC filings.
  • Tarnell: Tarnell offer business credit reporting for the plastics industry. It offers insight for material and equipment suppliers.
  • Seafax: Seafax provides credit reports that utilize international data and focus on the food industry.  
  • PayNet: PayNet provides credit ratings for small businesses via real-time data that’s gathered from its proprietary database. This database features over 24 million lines of credit, loans and leases.

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Frequently Asked Questions

How can I access my business credit reports?

The Fair Credit Reporting Act (FCRA) grants you access to your consumer credit reports from Equifax, TransUnion, and Experian for free. These can be found on AnnualCreditReport.com. Unfortunately, this doesn’t apply to business credit reports. If you’d like to see your business credit information, you’ll have to pay for it. 

How can I register with the business credit bureaus?

If you’re wondering how to register with business credit bureaus, you should know that you must incorporate your business and get a federal tax identification number as well as a business phone number. Then, you’ll need to work with vendors that report to the business credit bureaus. 

Are Dun & Bradstreet, Equifax Small Business Enterprise, and Experian Smart Business the only business credit bureaus?

While Dun & Bradstreet, Equifax Small Business Enterprise, and Experian Smart Business are considered the major business credit bureaus, there are several other business credit bureaus that can evaluate the creditworthiness of your organizations. Accurint by LexisNexis, net, and Global Credit Services are a few examples.

Why is it important to check your business credit reports?

By checking your business credit reports, you can gain an understanding on the financial health of your business. You can also dispute any errors or inaccuracies that may hurt you when you try to obtain financing for your business.

Fora Financial

Editorial Note: Any opinions, analyses, reviews or recommendations expressed in this article are those of the author's alone, and have not been reviewed, approved, or otherwise endorsed by any of these entities.

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Fora Financial is a working capital provider to small business owners nationwide. In addition, the Fora Financial team provides educational information to the small business community through their blog, which covers topics such as business financing, marketing, technology, and much more. If you’d like to see a topic covered on the Fora Financial blog, or want to submit a guest post, please email us at [email protected].