Dun & Bradstreet is the main company used to assess business credit and issue a credit score known as Paydex.
There are also other companies that provide similar credit evaluation services to businesses based on their independent databases.
One of them is Equifax, which offers a business credit scoring model known as the Equifax Small Business Enterprise/Equifax Small Business Credit Risk Score.
Equifax, one of the top three consumer credit rating agencies, now provides business credit evaluations for more than 22,000,000 small businesses and corporations to detect early signs of trouble by monitoring key customers, vendors and partners.
The Equifax model is designed for companies that provide goods and services to small businesses.
The score was created to improve risk assessment throughout the account lifecycle by predicting the likelihood that a new or existing small business customer will become seriously delinquent on provider accounts, or go bankrupt. within a period of 12 months.
Credit scores range from 101-816 with a lower score indicating a higher risk of serious delinquency.
There are also four reason codes that indicate the main factors that affect the credit score for a better understanding of the risk.
Equifax provides credit risk models for both consumers and businesses, but there are considerable differences between the two.
What business credit can do for you
You want to protect your personal finances. But when you have a business, this is very difficult to do.
Most creditors and lenders require that you provide them with your own personal guarantee for everything you do for the business.
This means that if something were to go wrong at work, they will also go after your personal assets.
What they don’t want you to know is that you CAN easily get money for your business without offering this personal guarantee.
Business is the credit you get on behalf of your business. It can be approved without the need for a personal guarantee.
Your profile is used to approve you, not your personal credit profile. This means that there is no personal guarantee and no personal credit check is required.
It’s easier to qualify for business credit than it is for most consumer credit. And usually the approval limits are higher too.
So this doubles your borrowing capacity and still reduces your risk.
As you use, you get approved for higher limits and more unsecured credit with Visa and MasterCard.
This helps you have a blank security in a time of need. And most importantly, you can use this credit without having any personal financial responsibility.
Your value and borrowing power will greatly improve as your business has a higher business score and borrowing potential.
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