Most people know they have a personal credit report. Fewer know their business can have one too. Experian, one of the three major credit bureaus, keeps business credit reports that lenders, suppliers, and even landlords can check before they work with you. Knowing what is in yours, and how it gets there, puts you in a better position when you ask for terms or financing.
Business Credit Is Separate From Personal Credit
Your personal credit report is tied to your Social Security number and tracks your personal loans and cards. A business credit report is tied to your business: its legal name, address, and identifiers. It tracks how the business pays its own bills.
Three companies are best known for business credit: Experian, Equifax, and Dun & Bradstreet. Each keeps its own file, collects data from its own sources, and uses its own scores. A vendor that reports to one may not report to the others, so the three files can look quite different. What Is a D-U-N-S Number? explains the Dun & Bradstreet side.
What Is in an Experian Business Report
- Business details: legal name, other names you use, address, phone, industry, years in business, and sometimes the owners or officers.
- Payment history: accounts with suppliers, lenders, and card issuers that report to Experian, and how quickly the business pays them.
- Days beyond terms: a measure of how late payments tend to be compared with the terms agreed.
- Collections: unpaid accounts that were sent to a collection agency.
- Public records: tax liens, court judgments, and bankruptcies.
- UCC filings: notices lenders file when they take business assets as collateral.
- Scores: Experian's business scores, such as its Intelliscore, which runs from 1 to 100. A higher score means lower predicted risk.
How Business Scores Differ From Personal Scores
Personal credit scores usually run from about 300 to 850. Business scores use different scales and look at different things. Experian's business scores focus on how the business pays its bills, how much it owes, and signs of risk like liens or collections, combined with details like industry and time in business.
Payment speed matters a great deal. Paying a supplier on the due date is good; paying early can be even better for some scores. And because many small vendors never report to a bureau, two businesses that pay the same way can have very different files, simply because one of them works with vendors that report.
Who Looks at It
Lenders check business credit before approving loans and lines of credit. Suppliers check it before offering net terms, where you get the goods now and pay in 30 days. Insurance companies, landlords, and larger customers may check it too. A strong report can mean better terms. A thin or negative report can mean a deposit, a personal guarantee, or a no.
Unlike personal reports, business reports can generally be purchased by anyone with a business reason to check, and the federal law that gives you a free yearly personal report does not cover them. That makes it worth knowing what yours says before someone else looks.
How a New Business Gets a File
A new business often has no Experian file at all, or only basic details pulled from public records. A file builds as accounts that report to Experian are opened and paid. Common steps:
- Make sure the business is set up consistently: the same legal name, address, and phone with your state, the IRS, your bank, and your website.
- Open a business bank account in the business's name.
- Open a few supplier or vendor accounts that report payments to the business credit bureaus, and pay them on time or early.
- Add a business credit card in the business's name that reports to business bureaus.
- Check the file every few months as it grows.
This takes time. There is no shortcut that creates years of payment history overnight, and anyone promising a high score fast deserves a hard look.
Checking Your Report and Fixing Errors
Experian sells business credit reports to business owners as well as to lenders, and its business site lists the current options. Read yours the way a lender would: is the name right, is the address current, are the accounts really yours, and are paid accounts shown as paid?
Errors happen, especially with similar business names or old addresses. Experian has a process for businesses to dispute information that is wrong. Gather proof, such as paid invoices, a lien release, or formation documents, before you start.
Small Habits That Help
- Pay vendors on time, or early when you can.
- Keep your business details identical everywhere.
- Keep business and personal spending separate.
- Watch for liens or judgments, and resolve them quickly.
- Review all three business files, not just one.
Business Banking and Credit, Set Up the Right Way covers the bigger picture. Our Experian business profile and business credit services can help you check your file and set up the basics, each on its own. Your payment history is what the bureaus record, so results depend on how the business pays over time.
Your business is building a reputation either way. Make sure the record is accurate.
Common questions
Your Experian business report is a separate file tied to the business. Many lenders still check the owner's personal credit too, especially for a new business.
Experian sells business credit reports directly to business owners through its business website. Check there for the current report options.
It depends on how many reporting accounts you open and how you pay them. A file usually takes months of on-time payments to become useful to lenders.
Want to know what lenders see?
Tell us where your business stands. We will help you check your business credit file and set up the basics that build it.
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