Experian Business Credit Report and Score Explained 2022
- Hey, welcome to the Get Business Credit YouTube channel. In today's video we're gonna be covering the Experian Business Credit Reports. This directly through Experian Business Credit Reports, smartbusinessreports.com. We're gonna be going over this today and how to actually read your paid Experian Business Credit Reports. So without further ado, let's get right into it. But before I do, if you haven't already became a subscriber, please hit that subscribe button and turn the bell notification on, I'd really appreciate it.
I'm constantly dropping new content, about how to build a business credit. All right, let's get right into it. So they have four different business credit reports. I'll have the link in the description below.
They have one Valuation Report, per report is $99. Then they have the CreditScore Report is 39.95 per report. And then they have ProfilePlus Report for 49.95.
And then they have the Business Credit Advantage for 189 per year. So I would tell you right now, do not get any of those because they're really not worth it. You wanna get this annual one, Business Credit Advantage because you get real time updates on your business credit report. These are just one time reports. So you wanna get the 189 per year and you actually get to see, the last four digits of the account numbers so you can see what trade line it is, that's actually reporting. If you have like NAB, NAB is fine, the NAB business boost, but you really wanna get the, you also wanna get this one.
And like I said, it's 189 per year. So it's not much if you divide that by 12 months. So I'm gonna show you guys how to go about getting it. So you're gonna go to the smartbusinessreports.com. Again, I'll have the link in the description below, but you'll search. I just put this as an example, ABC Company.
So you'll put your company name, city, state, and then hit My company. And then after you hit the Start Search, you're gonna see your company. And it's either gonna say, With Tradelines, or it's not gonna have tradelines. It's up to you if you wanna get this, if you do not have tradelines, if you're fairly new in business, but if you have tradelines, you definitely wanna hit Proceed. And then, like I said, it's gonna take you to the checkout page, to pay for the annual membership.
It's very important to get this if you're trying to really be serious about building business credit, because this will help you make sure that the business credit reporting agencies such as Experian has all the up-to-date information about your business. So this is a sample report. Just keep that in mind, just for the video purposes.
So it's gonna say the company name, like this one says, LaSalle Medical. So this is the business information. This is very important because when you first start your LLC or your Inc, S Corp nonprofit, whatever it may be, the Secretary of State is gonna basically just provide your business name, address, and sometimes not even have a phone number. So like LexisNexis or Experian, they're credit bureaus. They're gonna pull that from the different Secretary of States. So they're gonna have limited information about your business.
So of course, you wanna double-check and make sure the address is correct. The city, state, and ZIP code, make sure the phone number is correct. If it doesn't have like some of this information, then you wanna submit it. And there's an area where you can update it and submit it to Experian and they will verify it. But then the Experian BIN number, just keep this in mind.
This is kind of like a DUNS number in a way. It's the unique identification for your business that Experian will give you or assign to your business. Also, you'll see area where it says also, or has it been operating as, and those are just DBAs or associated to your business. A lot of you guys won't have that.
So just keep that in mind. Same as this, like the family linkage. So that'd be like, if you have multiple businesses, say you have a holdings company, and you have multiple businesses, it's gonna show that. But for most of you, you're not gonna have that. So this is the very important part that is lacking with like the Secretary of State.
A lot of times this information is not gonna be shown. So you need to provide it to Experian. A lot of times, the key personnel is gonna be blank, there is not gonna be anything there. So it's gonna say, there's update section, and it doesn't show it on here, but it will have the actual update link where you can submit the information. Like I said, I'll have all that in the description below. And it's actually called smallbusinesscreditfacts.com,
if I'm not mistaken, but like I said, I'll have the link in the description below. You wanna make sure you provide them with the key personnel, like the CEO. If you're the owner, you wanna make sure you provide that because this is gonna help with your approvals when you're applying for business credit, you have to keep this in mind when you apply for something in business credit, like Synchrony Banks or other banks, they wanna see full information about your business. So it's just very bare business credit profile. Chances are, they're not gonna approve you.
And if they do approve you, it's gonna be a lot lower limit than what they can offer you. So just keep that in mind, submit that information to them. If you're a single member LLC, submit your name. And then this is missing a lot of times, then that's gonna be your SIC Code and your NAICS Code. Those are your industry codes.
I'll have the link in the description below, how you can look those up? But you wanna make sure you have those provided to Experian because if you don't, a lot of times they will be blank because they don't have you put that a lot of times when you form your LLC or your Inc, and that's gonna directly correlate on getting approved, either denied or approved. There are certain types of businesses like trucking that are high risk. So you need to provide that. And then business type, it's gonna say, Incorporated, and then Experian File Established.
That's when Experian originally poured your file and then years in business, it's gonna show that. And then your total employees. Sometimes it'll say Update. So you wanna update that.
Sales data, that's gonna be bare usually. Especially if you're a new business. So it's up to you if you wanna provide that or not to them. And then filing data provided by, it'll say, the Secretary of State pulled the information and then date of incorporation. So make sure all that key data is submitted to Experian because you really need to have that submitted to them if you wanna increase your chances for the business credit approvals, you wanna just definitely make sure you provide that.
So Experian Business Credit Score, it goes from zero to 100, 100 being the best and zero being the worst. This is just example, pretty much anything from like 60 and above is fine, but don't get hung up on scores too much, too many people worry about PAYDEX scores and the Experian Intelliscores. Don't get hung up on them too much.
Just worry about building your business credit up and paying your invoices early on time or early. And then it will all fall into place. So the key score factors is number of commercial accounts with terms other than NET 1-30 days.
So what they mean by that is like, if you have like a revolving card, say, like I said, like Synchrony Bank, those are key factors. So it's other than net terms, other than like a Uline or a Quill. So you wanna get like mixed account.
Just like personal credit, you wanna get a mixed accounts. Number of commercial accounts that are not current. Obviously that's a factor if you don't pay your bills on time. Number of commercial accounts with high utilization, meaning to say, if you've got an Amazon business line of credit and you got a $10,000 line of credit, if you're utilizing 7,500 of that and it's reports, even though you're not late, but it's gonna report that and you're gonna get a lower score. But like I said, don't worry about the scores too much. Utilize the business credit, pay on time or early and the scores will fall into place over time.
Length of time on Experian's file. So obviously how long it's been with Experian, the data that they have? So it's somewhere like your personal FICO Scores, meaning like, the average age of accounts, longer is the better, like it says here, business credit scores range from one to 100, with this company's receiving a score of 60, higher scores indicate lower risk. This score predicts the likelihood of serious credit.
We want these, within the next 12 months, the score uses tradeline and collections information, public filings, as well as other variables to predict future risk. Okay, the next is they have another score and this one's more important in my personal opinion, Your Experian Financial Stability Risk Rating. It goes from one to five, one being the best, so you really wanna be at one or two, three, you start to be at medium risk. Obviously five is high risk. So you wanna be at one or two.
So a financial stability risk rating of one indicates a 0.55%, potential risk of severe financial distress within the next 12 months. Key rating factor is number of commercial collection accounts. So if you have collections, hopefully you don't, but that's a factor, risk associated with the company's industrial sector. So when I said the SIC Codes and NAICS Codes, that's what they're referring to. So there's certain industries that are higher risk, that do not pay back on time or show like a higher likelihood of becoming delinquent.
That's gonna be a factor on the financial stability risk from one to five. And there is some industries that are just high risk that you're in, that you could be in and there's nothing you can do about it. It's just high risk. So how you can neutralize the score on that is building up the business credit, pay on time or early, and it will just fall into place. So just keep that in mind. Balance to high credit ratio for other commercial accounts.
So the ratio of utilization, what you're using, that's pretty much what that means, risk associated with the business type. So this is similar to the company's industry sector. It still falls into that category. So the financial stability risk rating ranges from a low of one to high of five, with this company receiving a rating of one, lower ratings indicate lower risk. Experian categorizes all businesses to fit within one of the five risk segments. This rating predicts the likelihood of payment default and or bankruptcy within the next 12 months.
This rating uses tradeline and collections information, public filings, as well as other variables to predict financial future risk. So then we're gonna go to the credit summary. This is what you'll see on the Paid Report. Current Days Beyond Terms, DBT, one.
So you wanna be at one and then it's gonna show our predicted DBT. You wanna also, that's gonna be predicted as well. So obviously you wanna have that at one. And then the average industry DBT, let's say three. So that means like you're doing better than, say other trucking companies. If you're in the transportation or trucking business, you're at one.
And then the average industry for trucking, which is say three, that's a good thing. Payment trend indicator, stable. That's what you wanna show, lowest six month high balance.
So this is gonna be your lowest balance of say you have five, or 10 or 15 different tradelines. It doesn't matter, net-7, net-30, revolving, doesn't matter. It's gonna show the lowest amount. So say you have a Uline for $75 or $100. It's gonna show that there, the lowest one.
And then it's gonna say the highest six month balance, which is gonna be the highest amount that you've paid. Say any account one single time. So if you have a Amazon business line of credit for 10,000 and you utilize a 7,500, you've made that payment, it's gonna show the highest payment. That's very important to get, say no PG auto loans, because they wanna see that you can handle. That's what the banks wanna see, is that you can handle a single payment that is a high payment with a balance, and it's been paid. Current total accounts balance, so that's all the accounts combined.
And then the highest credit amount extended, that's gonna show, but this is for businesses that already build up a lot of business credit. So you might not see some of these sections in there if you're a fairly new business and not a lot of tradelines. And then you'll see payment tradelines, see charts and detail, there's a area, you can click on that, but it's gonna show the total tradelines that's been reported to Experian and their partners like the different banks and financial, the Small Business Financial Exchange. It's gonna show there, like this is, right here at Lender Consortium Experiences.
That's typically gonna be banks that's been reported to a Financial Exchange, such as the Small Business Financial Exchange. And then the UCC Filings. They're not bad. Those are typically loans, leasing that once you get a loan or say equipment leasing, the underwriter or bank will submit to your Secretary of State, that there's a UCC Filing just to let them know. They're not necessarily derogatory or anything, as long as you pay everything on time.
And then banking and insurance and leasing, it'll show that. A lot of you guys won't have this. Just keep that in mind. So there's an area that says, business scoring worse, 59%.
That's not that great. You wanna be above 60% on that. Higher the number, better. Bankruptcies, obviously you wanna be at zero. Liens, you wanna be at zero. Judgments, obviously you wanna be also at zero. Collections, it's pretty self-explanatory.
You also wanna be at a zero. This is the Payment Trend Summary. And the black here is the industry like I was telling you guys before. And then the blue is gonna be your company.
So you wanna have that always be at 100% of course. And I think this is also self-explanatory. You wanna be at 100% being current, and this is month by month. And then this will show up the 30 days beyond terms. So that's 2%. You wanna have that at 0% and you wanna have the current be at 100%.
So pay up everything on time. This is quarterly. Same thing as the last slide, but this is based on a quarterly, the last 90 days. And then trade payment information.
So this is where you see the account numbers. So you can, with the business advantage account, you're gonna be able to see the last four digits of the account so you can see which one it is, is it a Uline or whatever financial institution that approved you. On the reporting, you're gonna see the last four digits of the account number.
So you're gonna see like financial services. Hang on a second. Financial services, leasing, or it could be net-30, whatever it may be, the supplier category report. That date reported, the activity, meaning the last time that it was actually reported, and then the payment terms.
So it's gonna say like net-30, revolving. A lot of times in the Payment Experiences, Financial Trades, a lot of times it's gonna be saying revolving, rev, is usually what it's gonna show because the net-30s are gonna go under a different section. I'll show you in a minute. But it's gonna say recent high credit. And it's gonna say that amount.
And then the balance that you have, the current balance and current, you wanna always be at 100%, of course, keep in mind if you've got, say a $10,000 approval with Amazon, a business line of credit, it's not gonna show that 10,000. It's only gonna show what you actually used. So if it's $7500, it's only gonna show that 7500.
So don't get hung up on, oh, it doesn't show, that you got to, your $10,000 approved or whatever. Don't worry about that. You have to utilize the different business credit lines for them to actually report and have an impact on building your business credit.
Sometimes some of them will report if you're approved, but it's gonna show zero activity and that's not really helping you. So you need to utilize those tradelines and pay out on time. So Lender Consortium Experiences, Financial Exchange Trades. Those are gonna be like your, typically your business credit cards.
They report to a Financial Exchange, Business Financial Exchange. And like this says Commercial Card and the last four digits, balance date. It's gonna say the last payment date, payment terms, say monthly, and then your recent high credit, balance, current, of course you wanna be always current.
Pay everything early. I always say, if it's due, say on the first of the month, pay on the 25th. Pay early, and then there's tradeline experiences. So tradeline experiences are typically gonna be like Uline, we'll show here, and it's gonna say net-30. That's usually the area you're gonna see all the, net-30 accounts are gonna be in the supplier category under tradeline experiences. So it's pretty self-explanatory like the past ones and then additional tradeline experiences.
It's a lot of you guys, aren't gonna see those here. So just keep that in mind. This is just the sample report, but like this one says building materials, chemicals, auto rentals. So you're not gonna really see those in there.
Those are aged tradelines. So meaning like if it's over one year old, and you haven't used them, that's usually what that's gonna be showing in that area. And then also it's gonna be the same payment trends, you wanna be at 100%, and then the inquiries. So inquiries don't have as big of a effect on the business credit score than say on your personal credit.
So keep that in mind. Don't get too hung up on like, oh, you have to be at zero inquiries or it's gonna drop your score. Of course, Experian doesn't tell a 100% everything because that's one of their ways of giving you a score, it's their own algorithm. But in my experience, I haven't seen that inquiries really affect business credit score, unless maybe you're applying for 20 things, 30 different tradelines that are pulling Experian per month. But if you're just doing, three to five per month, that pulls Experian, I wouldn't think it's anything to worry about.
It's gonna say the supplier category. Usually it's gonna be financial services or it could be bank. So based on information found in this report, we recommend the following action. So at the bottom of the report, it's gonna tell you what you need to do to improve your scores based on your particular business. So it says here, the number of accounts reporting in the last six months is low.
You should attempt to use more accounts you may have or open new tradelines. So keep in mind, if you have say five or 10 tradelines reporting, you need to use them. So you just use them once a year, that's not gonna help you. You need to be using them at least every 60 to 90 days.
If you're really trying to build business credit, that's what you need to do. Like it says here, you have a number of accounts with terms that are not standard net-30 terms. You should attempt to obtain net-30 terms, if possible, from existing and future tradeline suppliers. So that's, if you don't have net-30 accounts, you need to. Back to what I said before, you need to have mixed accounts, just like personal credit.
You need to have mixed accounts. Say business credit cards revolving, net-30 tradelines. You need to have all those mixed. The length of time, Experian has credit history in your company also affects your score. So like it says right here, young companies are penalized for not having a long credit history.
Older companies benefit from having a long history. Don't get hung up in a lot of these numbers, just get those tradelines, build them up, pay for your net-30s or your evolving accounts, pay for them on time or early. And the rest will work itself out, the amount of your balances, the amount of your previous high credit on one or more of your tradelines are close. Pay down these tradelines.
So like I said, you wanna keep those tradelines paid down, but you also wanna show that you can handle multiple payments. And says right here, make sure all the information seen in your credit report is correct. So it says businesscreditfacts.com.
That's where you can submit it. Even if you don't get this paid business credit advantage account, it's fine. You can go to businesscreditfacts.com
and submit all year updated information. Okay. Like I said, here, Business Credit Advantage. This is the one you wanna get. You get your Intelliscore and Financial Stability Risk Rating.
And you get real time alerts of anything that changes. In my personal opinion, don't get any of these that are single time reports. And you're likely to be able to see your last four digits of the account number doing all the track. So I'll get the 189 per year annual. I may have a discount for you like Brex. If you with Brex, so you can get 50% off.
So I'll put the link in the description below. If you're with Brex, you can get it for like $94. That's pretty much it, but I just wanted to point out to you guys, how important Experian is. Experian, I kinda am a little bit biased out of the different business credit reporting agencies. There's Experian, there's Equifax commercial, and Dun & Bradstreet and Creditsafe. I favor Experian because Experian is used, in my personal opinion, on different tradelines.
It's used more often for good tradelines, such as the different gas cards and like Synchrony Bank. They pretty much use Experian. And all these tradelines are reporting to Experian every month, so you can check out my other videos on that. Please hit the Subscribe button. If you're not already a Subscriber, double-check and give this video a thumbs up.
I really appreciate it. I know this video was a bit long, but I wanted to give you guys a 2022 update on how to read the business credit report with Experian. With all that being said, you guys take care and stay tuned for more videos. Bye bye.
2022-01-21 13:50
