Finance & Lending


09 07 2016

09 07 2016

Business credit score 101

You’re probably already familiar with the basics of a personal credit score (or FICO). As a refresher, this number will range between 300 and 850. You will incur a lower score if you don’t pay bills on time – these could be credit card payments, utility bills, loan balances or something else. This may negatively impact your ability to borrow money in the future.

A business credit score works much the same way, but with a few notable distinctions. Before diving into the deep end of business credit, let’s get our feet wet with some of the basics:

What exactly is a business credit score?

A business credit score, like a personal credit score, is a grading scale that lenders use to determine the risk involved with financing a business loan. This score will fall somewhere on a scale 0 to 100, according to NerdWallet. The ideal credit score will be somewhere between 80 and 100. A business that’s within this range will be considered less likely to make a late payment, which makes them a low-risk borrower. Any score between 50 and 79 is more of a gray area. Businesses with a score on the higher end of that range may be more likely to get a loan than one that has a score of 50. Any business with a score below 50 is considered to be at high risk of making late payments, and may therefore find it difficult to qualify for a loan.

How is the credit score determined?

Every business should ideally have its own tax ID that is separate from the tax ID of the owner. According to Entrepreneur contributor Asheesh Advani, this is especially important for anyone who has a damaged personal credit score. This is because any data that is tied to that ID is what will ultimately be used to determine your credit score. These include payment habits, outstanding balances (i.e. on utility payments, loans, etc.), public records, business size, years in operation and various other factors. As such, it’s important to keep personal accounts separate from business accounts wherever and whenever possible.

“You should consider getting a separate business address (not a post office box), a separate bank account, an official corporate name registered with local authorities and a separate telephone listing,” Advani wrote. “While these administrative chores might seem minor, they are critical in distinguishing you from your business.”

It’s worth noting that some small lenders and banks may assess your personal credit score while they consider your business’s candidacy for a loan. If you have relatively strong credit, this shouldn’t be a problem; however, it the inverse is true, you may struggle as you apply for small business loans.

Who’s keeping score here?

There are three primary credit bureaus that supply a business credit score: Dun & Bradstreet, Equifax and Experian. For personal credit reports, Dun & Bradstreet is substituted with TransUnion, and a free credit report is supplied every 12 months. Business reports, however, are never free. Dun & Bradstreet charges $61.99, Equifax charges $99.99, and Experian charges $36.95.

As mentioned before, each of the three scores will be accomplished through aggregation and analysis of business account data – payment habits, outstanding balances, etc. There will be some minor variation between the types of data that each of the three bureaus gather, which means that there may be some variation between the three scores.

How important is your business’s credit score?

The answer here really depends. If, for instance, a business is sure that it will never rely on outside funding, then the company’s credit score might not be terribly relevant. That said, a bad credit score is typically symptomatic of bad times – or just extreme irresponsibility – regardless of whether you’re borrowing money.

However, if you are intending to take out a small business loan at some point, it’s important to take actions that will boost your credit score, avoid mistakes that could damage it, and to check it once a year. A bad credit standing could influence your business’s ability to borrow money when times are tough.

My business credit is bad and I need funding now. Is all hope lost?

The answer is no and you’re not alone. There are plenty of businesses that find themselves between a rock and a hard place when the time comes to apply for extra funding. Likewise, there are a bevy of business loans for poor credit available. It’s really just a matter of knowing where to look, and National Funding can point you in the right direction.

So while your credit score is important, having a bad one is not a death sentence for your company. There are still options that will help you keep your head above water.


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Any applications submitted electronically shall have the same force and effect as if the application bore an inked original signature(s). The above information, together with any accompanying financial statements, schedules, or other materials, is submitted for the purpose of obtaining credit and is warranted to be true, correct, and complete.


US Patriot Act:

To help the government fight the funding of terrorism and money laundering activities, Federal law requires all financial institutions to obtain, verify, and record information that identifies each person and business that seeks a business loan. What this means for you: When you apply for a loan, we will ask for your business name, address, and Tax Identification Number. We will also ask for your name, address, date of birth, and other information that will allow us to identify you. We may also ask to see your driver’s license or other identifying documents.


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The Merchant and Owner(s)/Officer(s) identified in the application (individually, an “Applicant”) each represents, acknowledges and agrees that (1) all information and documents provided to National Funding, Inc. (“NF”) including credit card processor statements are true, accurate and complete, (2) Applicant will immediately notify NF of any change in such information or financial condition, (3) Applicant authorizes NF to disclose all information and documents that NF may obtain including credit reports to other persons or entities (collectively, “Assignees”) that may be involved with or acquire commercial loans having daily repayment features and/or Merchant Cash Advance transactions, including without limitation the application therefor (collectively, “Transactions”) and each Assignee is authorized to use such information and documents, and share such information and documents with other Assignees, in connection with potential Transactions, (4) each Assignee will rely upon the accuracy and completeness of such information and documents, (5) NF, Assignees, and each of their representatives, successors, assigns and designees (collectively, “Recipients”) are authorized to request and receive any investigative reports, credit reports, statements from creditors or financial institutions, verification of information, or any other information that a Recipient deems necessary, (6) Applicant waives and releases any claims against Recipients and any information-providers arising from any act or omission relating to the requesting, receiving or release of information, and (7) each Owner/Officer represents that he or she is authorized to sign this form on behalf of Merchant.(8) I consent to receive direct mail, faxes, text-messages, and e-mails sent by National Funding and its affiliates for the purposes of transmitting account updates, requests for information and notices, and (9) this request is for business and not for consumer purposes.


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I hereby certify: (1) the information provided is true and correct, (2) you are hereby authorized to investigate all bank, credit, and trade references, and said references are hereby authorized to release any requested information to you or your nominee, (3) such authorization shall extend to obtaining personal credit profile in considering this application and subsequently for the purposes of update, renewal or extension of such credit or additional credit and for reviewing or collecting the resulting account, (4) this information may be transmitted by us to you and by you to underwriter(s) for the purpose of granting me credit, either electronically or manually, and that by submitting this application, I take full responsibility for transmission thereof, (5) I am over 18 years of age, (6) I acknowledge my rights under the Fair Credit Reporting Act, (7) I consent to receive direct mail, faxes, text-messages, and e-mails sent by National Funding and its affiliates for the purposes of transmitting account updates, requests for information and notices, and (8) this request is for business and not for consumer purposes.


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The Federal Equal Credit Opportunity Act prohibits creditors from discriminating against credit applicants on the basis of race, color, religion, national origin, sex, marital status or age (provided the applicant has the capacity to enter into the binding contract); because all or part of the applicant’s income derives from any public assistance program; or because the applicant has in good faith exercised any right under the Consumer Credit Protection Act. If for any reason your application for business credit is denied, you have the right to a written statement of the specific reasons for the denial. To obtain the statement, please write to National Funding Inc., 9820 Towne Centre Drive, San Diego, California 92121. Funding amount and credit approval is subject to a full credit profile review.