Business credit scores, explained

A personal credit score summarizes one person's borrowing. A business credit score summarizes how a company pays its bills, and it is a different thing in almost every way.

What goes into one

• Payment experiences. Suppliers, lenders and card issuers that report send in what the business owed and how close to the due date it paid. This is usually the largest part of the file.
• Public records. Liens, judgments and bankruptcies filed against the company.
• The company's details. How long it has existed, its industry and its size.

How they differ from personal scores

• There are several. Each business credit bureau publishes its own scores, on its own scale, so a number means nothing without knowing whose it is.
• Others read them. The SBA notes that business credit can affect what suppliers, vendors and partners offer a company, and its insurance rates. Expect a new supplier or landlord to check.
• Only reporting accounts count. A supplier or card that does not report adds nothing, however well you pay it.

Why your personal score still matters

The SBA notes that loan eligibility for a new business is typically based on the owner's personal credit score, and poor credit history is one of the main reasons small business loan applications are declined. Lenders often read both: the company's file for how it pays, the owner's for how the owner pays. In the Federal Reserve Banks' 2024 Small Business Credit Survey, 37 percent of employer firms applied for a loan, line of credit or merchant cash advance in the prior twelve months, and 41 percent of applicants received all the financing they sought.

Checking your file

Each business bureau shows a company its own file on its own terms; start at the bureau's site for the business, not one that promises to raise the score. If something is wrong (a late payment you did not make, a lien that was released, another company's account), ask the bureau to correct it and keep the proof. A file that is thin rather than wrong is fixed only by time and accounts that report.