How does business credit score work?
I'm pretty sure you type that in.
I've had a ton of people ask me this question and type this question.
And it does not work how most people think that it does.
So, I am going to set the record straight.
I'm going to to tell you the truth like I always do.
Let's go.
I'm going to tell you exactly how it all works.
But more importantly, I'm going to tell you why so that you can benefit from this.
I'm going to give you my secret sauce on how to get a good business credit score fast.
And then I'm going to share with you how I have bought everything from Escalades to Maseratis
and everything in between in my business' and how you can do the same thing.
So, when we're talking about how business credit score works, we first need to tell
you the difference between personal credit and business credit.
So, really quickly, obviously many of you are very familiar with your personal credit.
That's pretty much what we are fed when we first learn about credit.
We know that they are 3 credit bureaus, the Experian, Equifax and Transunion.
And they report our car loans and mortgages.
And a few other things that some people are not sure about.
But that's pretty much what the personal credit score is.
It's a reflection of what your risk ability is from the personal debt that you have to
take that you have taken out.
Instead of just those bureaus that I named for the personal credit, there are 3 bureaus
for you business credit.
Ironically, Equifax business is one.
I know Equifax is on both side.
The personal side and the business side.
Experian is also on on both personal side and the business side.
But again, they are actually most important on the personal side.
When it comes to your business side, there is one major business credit bureau.
And that is Dun & Bradstreet, okay?
Dun & Bradstreet is like the oldest business credit reporting agency around.
They collect all of the data and they report your business credit.
They've been around for many many years.
And their system works completely differently than your personal credit.
And how they score you is actually really, really different.
So, let's get in to it.
When it comes to your personal credit, of course, it's based off of (What?) your name
and your social security number.
So, most of our credit on our personal side is tied to our social security number.
On the business side, it is not tied to the social security number.
It's either tied to your E-I-N number.
But in this case, we are talking about your Dun & Bradstreet number.
So, when we're talking about getting your business credit and getting a good credit
score, I'm really talking to you first about how to do it with Dun & Bradstreet.
And the first thing that you want to do...
Of course you're going to need an E-I-N number.
You basically submit your whole profile to Dun & Bradstreet.
It is a free process to get a dun's number, okay?
A dun's number.
This is what you need.
It's a number that identifies you and your business.
And this is what they will make a credit report around.
And so, you got to their website and for free, you can set up the profile and you can get
your dun's number.
Now, again, they're probably going to try offer you some up sells or things like that
to help you.
But I do not recommend that.
I want you to just go to get your dun's number for free so that you can start.
Because again, Dun & Bradstreet is going to be the number 1 agency for credit bureaus.
And I'm going to talk to you a little bit more about how it works and how it kind of
get that score really fast.
So, when it comes to your Dun & Bradstreet number, there is what they call 3 different
ways that they're kind of looking at your credit score.
They have what's called a delinquency predictor score.
And then they have a supplier evaluation risk rating, okay?
So, those are like the 3 numbers inside of your Dun & Bradstreet.
Those are like 3 different scores that they give you.
But those are just like credit utilization or link of how long have you had an account.
So, it's very similar on the personal side to just information.
The real thing with the Dun & Bradstreet is similar to the FICO score that we are all
used to is called Paydex.
P-A-Y-D-E-X.
Your Dun & Bradstreet paydex score.
So the Dun & Bradstreet paydex score works very, very similar to the FICO score in one
way.
Like it has a score.
It has a range, okay?
And that's the only difference.
So, I know with personal credit, you can have like the credit score up to like 850.
Well, with Dun & Bradstreet, you paydex score is 0 to 100.
And anything over in 80, an 80 and above is an excellent paydex score, okay?
It is really easy actually to get a pretty good paydex score.
But you have to use vendors that report to Dun & Bradstreet.
So, if you want to start building your business credit and you want to get a good score, you're
going to have to use vendors in other words, deal with companies, make payments to companies
that actually report to the credit bureau, okay?
So, just like with your personal credit, if you get a credit card, they most like are
going to report it to the credit bureau.
But if someone loans you money and gave you credit and said, "Okay, we'll give you utility
bill.
And it's $400 a month."
Most likely when your personal credit report, that's not going to show up.
It's the same thing.
You have to find people, companies, vendors that actually report to Dun & Bradstreet so
that you can increase your paydex score.
The other credit bureaus for business are Experian and Equifax.
You remember I told you, they do actually have business reports as well that are totally
separate from the personal side.
Like I said, most people still use Dun & Bradstreet and Experian and Equifax are still not as
popular.
But telling you some good information, Experian, they have the same thing.
You know, you want like 80 score.
It's kind of the same things.
0 to 100 in anything over 80 is good.
Equifax is not really...
I don't really necessarily know all of theirs.
I actually have not had anyone that I've gone to that told me they were using Equifax business
credit report.
I have had the Experian once start to come up.
But 95% of all of the companies that I have dealt with that were looking to lend my business
money were looking at the Dun & Bradstreet credit report and a credit score.
So, now to the fun part.
Now to the fun part when we're talking about how the credit score works.
So, like I said, with your personal credit, the way that your credit score works is if
you pay your bills on time.
You can have a good personal credit score.
But it's more than just that.
You have to not really use your credit cards very much.
You need to have a mortgage, you need to have certain amount of installment loans.
They look at the mix of debt, okay?
Like the types of loans you have.
Like if you just a bunch of credit cards, you're not going to have the best credit score
because you need a mortgage, you need installment loans, you need student loans.
You need all different types of loans in order to have a really good personal credit score.
But on the business side, not so much.
You can start with just some vendor accounts.
I literally have a student that has an 80 paydex score right now.
And all they have is 4 trade lines, okay?
4.
I thought it was 5.
It was actually 4 trade lines.
They have the Uline, they have the Grainger, they have the Quill and then they have another
credit card, okay?
And they have an 80 paydex score.
And they're getting offers in all the time.
Different lines of credit, tons of lenders are reaching out to them offering them offering
them money.
I'm telling them not to take any of it just yet because we're looking for some good deals
with among all of those offers.
But once you have a good paydex score, they will literally start mailing you in offers.
Mailing you credit card offers.
Mailing you line of credit offers.
And again, this is in your business's name.
So, what you wnt to do is take them, okay/ many people are afraid.
But this is what you rather do.
Instead of taking more personal debt and things that report to your personal credit report,
I strongly recommend you don't do that and you take more things in your business's name
because it's a lot easier to get your business credit score all the way up.
Additionally, you are not penalized for things in the business world that you are penalized
for in the personal credit world.
For example, if you have a credit card on your personal credit and the limit is a thousand
dollars, and you spend $1,000, they're going to lower your credit score dramatically.
Because what you shown or what they think is that you can't manage your credit.
Regardless of how well, you're making the payments.
Whether you're paying them on time or not.
It really doesn't matter.
The fact that you charge up $1,000 and the limit was 1,000, they're upset and they've
ruin your credit.
They're going to lower your credit score.
Trust me, this has happened to me.
But on the business side, if they give you that same $1,000 and you use the $1,000, (1)
it's not going to report on your credit report in most cases.
Again, every bank is different.
But almost all of mine, they do not report on my personal credit.
And that's what I verified before.
I get it.
And then...
Unless I default, of course.
If you don't pay them and you go on to collections, then yeah, they're probably going to put on
your personal credit because they want their money.
But on the business side, again, if you had that same of thousand-dollar credit card and
you use $1,000 of it, they would not lower your paydex score.
In fact, as long as you're making the payments and you're doing a good job with that, most
likely, they're going to increase your paydex score because they care about how well you
manage your debt.
How well are you and your business able to come up with the money each month to pay your
bills.
And the more you can do that, the longer you can do that, the better it is.
Now, if you're not able to pay, you start paying late, yeah, your paydex score will
go down really fast.
But at the same time, you don't have to worry about using those credit lines and using those
credit cards or being super careful about not going over 30%.
Like in the real world, in the personal credit world, if you have a thousand-dollar credit
limit, you really shouldn't use more than $300, okay?
You shouldn't use more than 30% of it if you want a really good credit score.
But on the business credit side, go ahead and use the 1,000 and keep paying it, okay?
Pay it off when you get money.
Make the payments.
Either way, you're going to be okay.
They care about you managing the debt.
So, go right now to noellesfreetraining.com, okay?
Noellesfreetaining.com.
That's N-O-E-L-L-E with an S. Free, Training, ."com".
I basically created an entire free training just for you so that you can learn more of
this.
It's about an hour long.
It's a little bit longer than what I could've done on YouTube.
But I want to make sure that everyone is taking advantage of that, getting that free information
where I'm training you, helping you along with this.
And making sure that you are successful.
This is Noelle.
To you success.