A business credit score is a rating calculated based on your credit history. It is an indicator of the financial health of your business that gives lenders insight regarding how risky it may be to lend money to you.

While business credit scores were created to help lenders, they are also an excellent indicator for business owners on the financial hygiene of their business.

What are Business Credit Scores?

There are many credit bureaus in Australia that prepare business credit reports for lenders and creditors to use when deciding on whether to approve applications. Some of the agencies are Equifax, Experian, Illion and Creditor Watch. 

These companies have slightly different measures. However, they are all essentially measuring the same thing. Provided by Experian and Illion is a number between 0 and 1,000, while the credit score range of Equifax is between 0 and 1,200. Creditor Watch uses a different rating system altogether and their scores are displayed using letters where A1, A2 and A3 are very low risk, all the way down to F. The score indicates to a potential lender how trustworthy you are as a borrower and helps them decide whether or not to provide you with a loan.

Your business credit score is a rating given based on your overall credit history. Your history may be impacted every time you make a late bill or loan payment, apply for credit, or pay a utility bill, so it’s critical that you do everything you can to keep it as high as possible.

What factors contribute to a Business Credit Score?

Your score is derived from the information listed on your business credit file. This information includes the following:

Credit shopping habits

Your credit score can be impacted by your business’ finance-shopping habits and the types of credit you apply for. An increase in credit enquiries relating to applications may negatively impact the rating.

Payment history

Paying your bills and loan obligations late may negatively impact your rating. So it’s important to always pay on time. If your business is new, you might be considered a riskier borrower than a business that has been operating for a longer period of time. This is because you haven’t established your track record yet and have no payment history. 


Filing for bankruptcy will negatively affect your business’ rating. Once you are declared bankrupt, you are legally unable to repay your debts, so it makes sense that your credit score will plummet to zero.

Public records

Information that is a part of public records such as collections, litigation, court judgements and unpaid taxes can affect your score.

Business information

Information about the business, such as its structure, legal entity name, business address, directors, shareholders, years in business, trading history, time in business and other information is included in your business credit report and is used to determine your score.

Difference between Personal Credit Score and Business Credit Score

Business credit scores

A business credit score is calculated based purely on commercial factors to measure how well you’ve managed your finances. These factors include defaults, loan enquiries or other external records. Lenders and other businesses use the score to get an idea of whether you’re reliable and trustworthy when it comes to business and credit.

Personal credit scores

A personal credit score measures information from your personal report — things like the timing of your internet bill payments and personal credit card repayments. Essentially, a lot of components are the same as with the business score; the thing that differentiates them is the purpose of the credit — if it’s for personal use, it impacts your personal score, whereas credit for commercial use impacts your business score.

If your business is structured as a sole trader or partnership, you need to keep both your personal and business credit scores healthy. A sole trader is a person who is self-employed and carries on a business individually. Thus, they may request financing as an individual, but the funds are used for business purposes. When applying for business finance, not only will their personal credit score be examined, but also their business credit score. However, this does not work the opposite way; when an individual applies for personal finance, their business credit score is not taken into account.

How can I check my Business Credit Score?

The credit reporting bureaus (Equifax, Experian, Illion and Creditor Watch) allow you to periodically check your business’ credit score.  Propell’s Business Pulse health check also allows you to check your credit health, along with other key financial indicators for overall business health. There are also other Australian online services that allow small businesses to receive their credit scores for free — without impacting their report.  Accessing free business credit score checks allows businesses to be better prepared regarding finance.

How can I improve by Business Credit Score?

Your business credit score is crucial for the future of your business. So, how can you improve it? We’ve got you covered! Here are some tips:

Monitor your rating

Check your business credit report a few times a year. If it falls below a certain threshold and you’re unsure why, contact your creditor or the credit scoring company. It’s not uncommon for errors to crop up every now and then. These can easily be fixed by communicating with the right parties. However, if the score is decreasing because of legitimate circumstances, it’s important to note that there’s no quick fix for this — so be wary of any agency that claims to be able to repair your credit under these circumstances.

Prompt payment

Always pay your bills on time. On-time payments play a large role in improving your business credit score.

Utilise healthy credit

You can’t prove your creditworthiness without a credit history! Maintaining healthy forms of credit such as keeping on top of credit card or business loan repayments can be an effective way of establishing your history with finance products.

Limit applications

Enquiries are recorded on your file each time you apply for a loan product. If lots of enquiries are recorded close together, it’s a sign that you aren’t responsibly managing your money or you’re being rejected. For this reason, your score will decline.

Your business credit score impacts your ability to secure business loans, credit cards, utilities, telecommunications services, and other payment terms. The financial health of your business is essential for its success. If your business has a bad credit score, don’t stress! There are various ways to improve your credit score — the first step is understanding what your score is.

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