A business’s likelihood of making timely loan payments and avoiding default is indicated by its business credit score, which is a credit rating. For the purpose of determining loan eligibility and interest rates, lenders mainly rely on company credit scores.
The scale for business credit ratings, which range from 1 to 100, is different from the one used for personal credit scores. A company is thought to be more creditworthy the higher the number. According to the US Small Business Administration, your company needs a score of roughly 75 to qualify for a small business loan. The capacity of a business to sign a lease or buy things on credit from suppliers can also be impacted by credit scores.
What factors affect a business’s credit score?
Business credit scores are calculated using a number of variables.
Credit history. When assessing a company’s score, business credit reporting bureaus consider how old the company is. Businesses having a longer track record of financial stability receive higher ratings than more recent companies.