In order for a company to obtain credit lines, equipment leases, and other types of loans, it needs to be rated well by credit agencies. Many small businesses rely upon their owners’ personal credit scores to be able to obtain business credit cards or small bank loans. Relying on a company’s owner’s credit scores limits the amount of money that the company can actually borrow.

The best way for a company to plan for the future is to build their own corporate credit rating. This is possible through two companies, Dun and Bradstreet (www.dnb.com) and Experian (www.experian.com). Dun and Bradstreet has built a corporate credit rating model called D&B PAYDEX®, which serves as a numerical score similar to a Fair Issac & Company (FICO) score that an individual has. The PAYDEX Score is on a scale from UN (or zero) to 100. Based on this PAYDEX Score, other companies and lenders can see how well a company pays their bills on time. It is generally accepted that a score of 80 or better is deemed favorable on a PAYDEX scoring scale.

Experian has created a system similar to Dun and Bradstreet’s which is named Intelliscore. This score, like a PAYDEX Score will show a company’s likelihood of repaying their bills as well. The Intelliscore scale begins at 0 and goes up to 100. The higher the score, the less likely a company is to default on their credit payments. Experian has over 18 million companies in their Intelliscore database, so it is crucial for a company to ensure that they are placed into this database to they can be compared to similar companies in their industry.

Building these corporate credit ratings is vital for a company to be able to stay competitive in their marketplace. A company with a clean PAYDEX and Intelliscore report is most likely to receive better terms on financing, and will receive much more flexibility when it comes to negotiating the amount of credit that it can borrow.