Hello everybody it's Ty Crandall with Credit Suite and in this video we're going to give
you the lowdown on how your business credit scores really work, by the end of this
video you're going to know exactly how your commercial credit scores work and
most importantly what you can do to actually
control those scores to make sure you get the best terms of the most amount of
money on credit and financing. So when it comes to business credit reporting there
are three main reporting agencies in the business world, Dun and Bradstreet is the largest business credit reporting
agency, Experian the second largest and about a tenth of the size of Dun &
Bradstreet and then you have Equifax that's a third. So when you're building
business credit it's really important that you're building business credit with all
three and that you're maintaining good scores
with all three as well. So let's start with Dun & Bradstreet, Dun & Bradstreet, Paydex
score is based on one factor in one factor only your payment history, how you pay
literally depicts what your score is, so for example if you pay your bills on time and
agreed you'll have an 80 score out of 100 with Dun & Bradstreet with a 100 being
the highest score and the best score that you can get, if you pay your bills early well
then your score could be 85 90 even as high as 100. If you
pay your bills late how late you pay your bills on average determines how low your
score is 70 60 50 even down to a 20 score. So all you have to do to get good scores
with Dun & Bradstreet is pay your bills as agreed. Now they also have something
called weighted average, and with weighted average
the accounts that have the higher limits way more into the score than accounts
with lower limits. That means if you're ever going to go late on a credit card you'd
always want to choose the lower limit credit card first because the higher
limit credit cards actually calculate more weight
into the score then the lower limit ones do. Another tip with Dun & Bradstreet you
have to have three accounts reporting to them to be issued a Paydex score, actually,
there's two things you need to do. You need to have your DUNS number
with Dun & Bradstreet and you need to have three accounts reporting with them to
have a score so if you started building credit with Dun & Bradstreet
you don't yet see a profile there you don't see a score more than likely it's because
you don't have your DUNS number yet or you don't have a total of three accounts
reporting to them. Now Experian well wait talk about Experian in a minute
let's dive into Equifax. Equifax works much the same
as Dun & Bradstreet their small business risk score to picture risk of going lay on
accounts of the future actually going 90 days late, and just like with
Dun & Bradstreet your scores based on how you pay your bills. So all you have
to do is pay your bills on time and you'll get a good score. Now Equifax just like
just like Dun & Bradstreet and Experian the score ranges
from 0 to 100 with 100 being the highest score that you can get, now when it comes
to Experian they're a little bit different than both Equifax and Dun & Bradstreet about
85% of your score with Experian really has to do with how you pay your bills. The other
15% has to do with how long you've been open the industry that you're in the size
of your business even balances that you have on credit cards. So even though
there's other factors that calculate into Experian Intelliscore it's
still payment history that accounts for the vast majority of the score so with Experian
Equifax and Dun & Bradstreet the main thing to do is to get credit that reports to
each one of them pay your bills on time or early and you will get a good score and
remember the earlier you pay those bills the better your score. So my advice you
have to wait till it item actually ships or it won't count as credit it will cash as a
count as a cash transaction but as soon as that item ships
in as soon as you're allowed to pay the bill pay the bill so for example when I'm
ordering things from Quill they let me pay the bill as soon as the item ships and that's what
what I do when I get a confirmation from that the item ships I go in and pay the bill,
but when I have credit with places like staples they won't allow me that same
luxury they will make a statement populate before
they'll let me pay it. That means I have to wait till my statement is created in their
system to even pay the bill. So in those cases we have our accounting team watch
for when those statements populate and as soon as it populates as soon
as we have the ability to we get in there and
we pay that bill. Now also remember Experian and Equifax different to
Dun & Bradstreet you only need one account reporting with them to be issued
a good credit score if you're paying that bill was agreed, remember Dun &
Bradstreet needed 3 accounts reporting. So the Experian and Equifax
did at least one account that reports them pay the account as agreed and that's the
key to you having really good credit scores. So to learn more about having
good credit scores for your business visit us at creditsuite.com that's creditsuite.com
on our main page you'll see that we have a great free guide on building your
business credit step-by-step and you'll also see at the top right of our page we
have social media links where you can get all kinds of other information on credit
building credit, how your credit scores work everything
to do with building business credit and getting financing for your business so if
you're looking to get the most money for the best terms make sure you visit us
online at creditsuite.com grab our free guide and check out the top right
of our page where you're able to get all kinds of
daily tips and tactics to help you get the most financing for your business at the best terms