Stage Three of the Free Guide
How to Build Small Business Credit with No Personal Guarantee

Step 10 ~ Experian Business Scoring Model

Experian Business’ scoring model adds a few components from their personal credit reporting when ranking the risk of a business.  As with Dunn & Bradstreet (D&B) there are a variety of reports that lenders use when determining whether or not to approve your new corporate account. We will concentrate on the basic score since we are assuming you are just beginning the process of building corporate credit.

The only score we will talk about is the Risk Score, and in the next step you will be given access to a resource to pull your Experian Business credit file.  The Risk Score ranges from 0-100 with 100 being the best possible score.  The basis of this score comes from the percentage of businesses in your field with a better or worse risk profile than that of your business, and corporate credit lenders are going to be looking for at least an 80 to approve your corporate credit account.  Because any given businesses credit file is constantly changing this number can and will fluctuate naturally, yet it is still important to understand what causes these fluctuations so you can make sure your business credit file is at it’s best when applying for new corporate credit.

The Experian Business Risk Score for your business will fluctuate based on the following factors:

• New Accounts ~ The score will drop dramatically with each newly reporting account.  After a few months of reporting the status will change and your score will return to normal.

• Inquiries ~ Too many inquiries will drop your score, and too many recent inquiries will look bad on business credit applications and could cause it to be instantly declined.

• Usage ~ When an account first reports, it will likely report the purchase amount so it will initially look like you are using all your credit.  As soon as it’s paid off and reports, the score will return to normal.

Now you have the basic knowledge you need to understand your business credit file let’s move on to the next step and view your Experian Business credit file.