Some of the business credit reporting agencies include:
- Paydex
- Dun & Bradstreet
- Experian Smart Business Reports
- Equifax Small Business Financial Exchange
These are some of the primary sources for business credit scores.
The similarity between and individual credit score and a Paydex score is that both are used to determine whether you get a loan and on what terms. The difference is that individual scores use many factors to determine credit worthiness whereas the Paydex formula looks at only one thing: if a business makes payments on time and meets creditors' payment terms. That's it.
Paydex scores range from 0 to 100; 80 and above are considered a "golden" score. Businesses with a score of 80 meet creditors' terms -- that is, they pay on time. Anything above that means they pay bills before they arrive or during the early payment discount period. A business credit score of 70 means you're paying your bill 15 days late; with a score of 50 you're 30 days late.
How to establish a Paydex score
As is the case with personal credit, it's always a good idea to apply for a loan or credit line before you actually need it. It is advised to begin building your Paydex score three to six months before you plan to apply for a loan. The easiest and and cost effective way is apply for a D-U-N-S number -- a nine-digit business identification number -- and use it to establish a small line of credit with a company that automatically reports to D&B. C&C Capital Lending offers many unsecured lines of credit for your business that may help establish your business credit.
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