Decoding Business Credit Scores: What Every Credit Manager Should Know

Business credit scores are a cornerstone of credit risk management. For U.S. credit managers, understanding how these scores are calculated across the major credit bureaus is crucial. Dun & Bradstreet (D&B), Experian, Equifax, and Creditsafe each have their own scoring models, score ranges, and data inputs. In this comprehensive guide, we’ll explain how business credit scores are calculated at each bureau, dive deeper into a couple of scoring models with the most transparency, and show real-world examples of how certain behaviors (like slow payments or high balances) can affect scores. Finally, we’ll discuss how to use these business credit scores in your credit decisions – what to look for, important thresholds, and how to combine score insights with qualitative information like trade references and financials for well-rounded credit evaluations.

How Major Business Credit Bureaus Calculate Business Credit Scores

Each business credit bureau uses a different methodology and scale to rate a company’s creditworthiness. Below is a high-level overview of business credit score calculations at D&B, Experian, Equifax, and Creditsafe – including score ranges and key data factors considered by each:

Dun & Bradstreet (D&B) – PAYDEX Score

D&B’s flagship business credit score is the PAYDEX Score, which ranges from 1 to 100 (higher is better). The PAYDEX focuses exclusively on payment history – it’s essentially an index of how promptly a business pays its bills. In fact, payment performance is the sole factor D&B uses in this score​. To generate a PAYDEX, a business needs at least three tradelines (supplier accounts) reporting to D&B (which typically also requires having a D-U-N-S number to identify the company)​.

• Score Range & Meaning: An 80 PAYDEX indicates the company pays on time (net terms met exactly). Scores above 80 are possible only if payments are made before the due date (early)​ – for example, paying 30 days early can yield a perfect 100. Conversely, scores below 80 mean the business pays late. D&B generally considers 0–49 as high risk (often 30+ days late), 50–79 as medium risk (15–30 days late), and 80–100 as low risk (on time or early)​. In short, the more promptly bills are paid, the higher the PAYDEX.
• Data Used: D&B collects data from vendors and suppliers (“Trade References”) on your company’s payment experiences​. It looks at factors like the payment timeliness (days beyond terms), the amount of each invoice, and the recency of payments. Because PAYDEX is purely trade-payment driven, it does not directly consider things like financial statements or legal filings – D&B provides separate scores for those (e.g. a Financial Stress Score and Delinquency Predictor), but the PAYDEX specifically zeroes in on trade credit behavior.

Experian – Intelliscore Plus

Experian’s primary business credit score is Intelliscore Plus℠, which also uses a scale of 1 to 100​. In Experian’s scoring model, a higher number likewise indicates lower risk, meaning 1 is the highest risk and 100 is the lowest risk of default. The Intelliscore is a more complex, multi-factor model compared to PAYDEX.

• Score Range & Risk: Experian categorizes scores into risk classes, for example: 76–100 is considered low risk, 51–75 low-to-medium risk, 26–50 medium risk, and so on down to 1–10 as high risk​. In practice, many lenders view an Intelliscore above ~75 as excellent, while anything in the teens or single digits would signal serious credit risk. One reference point: a score of 51 is often cited as a common minimum to be considered acceptable for financing​, whereas a score in the 70s or higher is strong.
• Data Used: Experian’s model pulls from a broad range of business data. Payment history is a major component (paying on time will help your Intelliscore, just like it does D&B’s PAYDEX). But Experian also factors in credit utilization on business credit cards, the number of trade lines, recent credit inquiries, any collections, liens, or judgments, years in business, and even comparative industry risk metrics​. In total, Experian has noted that Intelliscore Plus can draw on hundreds of variables (including both the business’s own data and, in some cases, the owner’s personal credit data) to predict the likelihood of serious delinquency​. For instance, a high balance-to-limit ratio on a business credit account or a newly filed tax lien will negatively impact the score​. By contrast, a long, clean payment record and low utilization will boost it. (Notably, Experian also offers a Financial Stability Risk rating that focuses on likelihood of business closure, but the Intelliscore is the go-to for trade credit risk.)

Equifax – Business Credit Risk Score

Equifax maintains business credit reports and multiple scoring models. A commonly used Equifax business credit score is the Business Delinquency Financial Score, which ranges roughly from 101 to 650 (higher = better). This score predicts the likelihood of severe delinquency (e.g. accounts going 90+ days past due) or charge-offs. Equifax sometimes simply calls this their Business Credit Risk Score.

• Score Range & Risk: The Equifax score is on a different scale than D&B or Experian. In this model, 101 is the highest risk (essentially the worst score) and 650 is the lowest risk (best score)​. Equifax provides risk classes for ranges within this score. For example, a score in the 100–300 range indicates high risk of default, mid-300s to 500 or so is moderate risk, and scores in the upper 500s and above indicate low risk​. In one breakdown, 585–650 is considered low risk (the business is very likely to pay as agreed), whereas 101–298 is high risk​. The higher the score, the more confidence that the business will not face severe payment issues.
• Data Used: Equifax collects similar data to the other bureaus. An Equifax business credit report will typically include tradeline details (payment history with vendors and lenders), any UCC filings (secured financing statements), public records like bankruptcies or judgments, tax liens, the company’s demographic info (industry, size, years in business, ownership), and credit inquiries made by lenders​. Equifax’s scoring algorithm uses these inputs to statistically gauge the probability of serious delinquency. For example, a history of late payments or a recent bankruptcy filing will drag the score down significantly. On the other hand, a company with a clean public record, few credit inquiries, low utilization, and on-time payments across many accounts will score on the higher end. (Equifax also offers other measures, like a Payment Index (0–100) indicating percent of on-time payments, and a Business Failure Score predicting bankruptcy, but those are beyond our scope here.)

Creditsafe – Creditsafe Credit Score

Creditsafe is a newer player in the U.S. market but a major global business credit bureau. Creditsafe provides a credit score on a 1–100 scale for businesses, where 1 represents the highest risk and 100 the lowest risk. The Creditsafe score is essentially a probability of default indicator:

• Score Range & Risk: Like D&B and Experian, a higher Creditsafe score is better. Creditsafe explicitly ties scores to probability of default (PoD). For example, a company with a Creditsafe score of 90+ is very low risk, whereas a company with a score in the teens or 20s is at high risk of defaulting or paying severely late. Many organizations set specific cutoffs; for instance, one contracting firm might require any bidder to have a Creditsafe score of at least 35 to be considered financially stable (below that would be a red flag). In general, scores in the 70-100 range are safe, 40-69 cautionary, and the very low scores (e.g. <30) denote significant risk – though exact breakpoints can vary by industry or country.
• Data Used: Creditsafe takes a comprehensive, data-rich approach. Its algorithm considers trade payment data, public records, industry averages, company financials, size and age of the business, management history, group linkage (parent/subsidiary risks), and more​. Creditsafe boasts an enormous database – monitoring over 85 million trade lines worldwide and updating over 1,000,000 data points daily – which feeds into its scoring. Every reported invoice, payment experience, legal filing, or financial statement update can impact the score. For example, the Creditsafe report for a company will show metrics like Days Beyond Terms (DBT) (how many days late on average the company pays its bills) for the last 12 months​. A worsening DBT (meaning the company is paying later and later compared to terms) will correspond to a dropping score. Creditsafe also incorporates any derogatory public filings (tax liens, court judgments, bankruptcies) much like consumer bureaus do – a new judgment will raise the company’s risk profile and lower the score​. Additionally, if the company files financials (common for larger or international companies), key financial ratios (like debt-to-equity, profit margins, liquidity ratios) may influence the score as indicators of stability​. Because Creditsafe is so data-driven, it tends to provide not just a score but also a recommended credit limit and a probability of default. In essence, it tries to paint a full picture from many angles, updated in real-time.

Using Business Credit Scores in Credit Decisions

Understanding these business credit scores is only half the battle – the other half is applying them effectively in your role as a credit manager. Each score provides a piece of the puzzle about a customer’s creditworthiness. Here are some best practices for using these scores in decision-making, along with tips on combining score data with qualitative insights:

1. Know Your Key Score Thresholds: It is often better to view scores as rough approximations than exact numbers. We recommend creating 3-4 groups of scores and treating all companies within those ranges the same. For example:
   • Needs Serious Review: 0-20
   • Exercise Caution: 20-50
   • Standard Due Diligence: 50-80
   • Outstanding: 80-100

The exact ranges will come down to what credit bureau you decided to use and your own risk tolerance.

1. Watch for Score Changes and Trends: Don’t just check a customer’s score at onboarding and forget it. Business credit scores can change frequently – especially Creditsafe and Experian scores which update with new filings or tradelines. Implement a monitoring routine. Many bureaus allow you to monitor accounts for changes (for example, getting alerts if a score drops by a certain amount). A sudden drop in a partner’s score can be an early warning sign of trouble. By tracking trends, you can catch deterioration before it leads to non-payment. Conversely, improving scores over time might allow you to extend more credit or better terms to a customer who has earned more trust.
2. Look Beyond the Score – Read the Report Details: The score itself is a summary. Always review the factors behind a score by reading the full credit report. If a customer has a low score, the report will usually list reasons (e.g., “serious delinquency reported” or a specific collection account). Identifying why the score is low is vital. It could be something you can mitigate – maybe a dispute with a single creditor – or it could be systemic financial distress. Also check for any public records or derogatories listed on the report (even if the score is high, something like a pending lawsuit is good to know). Trade references and payment experiences listed in the report can tell you which suppliers they pay slowly. Perhaps they treat their major supplier well but pay smaller vendors late – that nuance is important if you’re a smaller vendor to them. The presence of any UCC filings might tell you if the company recently took out secured financing (which could affect their leverage). All these report details provide qualitative context that a numeric score alone cannot.
3. Combine Scores with Qualitative Insights: A truly effective credit decision considers qualitative information alongside the scores. This means:
   • Trade References: Don’t hesitate to ask the applicant for trade references (other suppliers or creditors) and actually call or email those references. Sometimes a conversation reveals things a report can’t – for instance, a reference might tell you “They always pay 15 days late, but they do pay and communicate well.” That might align with a merely moderate score, and you could decide that risk is manageable. Or you might learn that the customer places large seasonal orders, etc., which helps you set appropriate terms.
   • Financial Statements: Especially for a big credit line or a privately-held customer, you might request financials (income statement, balance sheet). Analyzing financial ratios can corroborate what the scores indicate. For example, if the company’s debt-to-equity ratio is very high or cash flow is thin, it explains a lower score from Creditsafe or Experian. If the financials look strong despite a mediocre score, perhaps the score is lagging or the company had a past issue that’s been resolved. Use the financial data to either gain comfort or flag concern beyond what the score says.
   • Additional Signs: Even more qualitative insights like their BBB rating, company reviews, internet presence, news articles, and more can help paint a more holistic picture of who you are doing business with.
4. Adjust Credit Strategies Based on Scores: Use the scores to inform how you extend credit, not just whether to extend credit. For example:
   • For a high-risk applicant (low scores across the board), you might still do business but require Cash on Delivery (COD) or a prepayment until they build a track record. Or you might start with a very low credit limit.
   • For a moderate-risk customer (scores in that middle band), perhaps you grant Net 30 terms but with a low credit line, or ask for a personal guaranty or collateral (if applicable) to secure the account. You might also shorten the review cycle – check their credit again in 3 months.
   • For a low-risk, strong-scoring customer, you could be comfortable offering more generous terms – maybe Net 60 or a higher credit limit – to win the business, knowing the risk of nonpayment appears low. These are the customers you compete to secure, so leveraging their good credit by offering favorable terms can be a strategic move.
   • Always document these decisions and monitor accordingly. If someone’s score improves, you can consider loosening terms; if it deteriorates, be ready to tighten up.
5. Use Scores as Part of a Broader Credit Risk Framework: Finally, integrate business credit scores into a broader risk assessment framework. Many companies use a credit scoring matrix or model internally that might include external bureau scores as inputs along with other factors (size of exposure, strategic importance of account, etc.). Ensure your internal credit policies clearly outline how to use bureau scores: for example, “If two out of three major bureau scores are below a threshold, escalate to manager review,” or “Any account with a D&B score below X must provide additional security.” The scores should streamline your process – making it faster to flag risks and approve good risks – but not replace thoughtful analysis. Always apply common sense and professional judgment on top of what the scores tell you.

In summary, business credit scores from D&B, Experian, Equifax, and Creditsafe are invaluable tools for credit managers. They distill vast amounts of data – payment histories, public records, financial indicators – into easy-to-digest metrics of risk.​ Use these scores to set credit policies and monitor your portfolio continuously. But remember that no single score tells the whole story – the best credit decisions come from combining score data with qualitative insights like trade references, customer communication, and financial analysis. Equipped with both the numbers and the narrative, you as a credit manager can make informed decisions that protect your company from credit losses while still supporting sales growth.