Business credit is essentially a measure of a business’s financial risk: its ability to repay loans and fulfill other financial obligations. It’s actually similar to personal credit, except it covers a much wider scope. Like personal credit, business credit is based on credit reports. A business credit report contains a myriad of general business and financial data about a company, including business history, classification (NAICS and SIC codes), annual sales, judgments, liens, payment records, loan accounts, and operational data.
This information is gathered and organized by credit bureaus, the main ones being Experian, Equifax, PayNet, and Dun & Bradstreet (DnB). Each credit bureau keeps a credit database with the information it compiles from the business itself, public records, credit reporting agencies, banks, lenders, insurers, and other sources. Every business is assigned a credit score based on the bureaus’ credit rating systems.