A Look at the Experian Business Credit Scoring System

Sean Hawley

What is the Experian Intelliscore Plus?

Intelliscore Plus from Experian is a statistically-based credit risk evaluation. The main purpose of Experian Intelliscore Plus is to help companies, vendors, investors, and potential commercial credit grantors make well-educated decisions about who they should or should not do business with. These entities, of course, don’t want to lend money to or get involved with a company that has a high risk of being unable to pay back financing. The score is an indicator of that level of risk.

Intelliscore Plus Score Calculation

Experian pulls over 800 commercial and owner variables from public records, your credit file, and public filings to calculate Intelliscore Plus credit scores. The actual formulas for these scores, like all credit scores, are proprietary, so exact details of how each item impacts the score is not revealed. However, there are general guidelines that can help you understand what makes up a strong score:

  • Payment History: The credit bureaus call this “recency” but in easy-to-understand terms, it’s nothing more than your history of paying bills on time (or not). This includes the number of times your account(s) become delinquent, the percentage of accounts that are currently delinquent, and your overall debt balance.
  • Frequency: Closely related to payment history, frequency factors in the number of times your accounts have been sent to collections, the number of liens and judgments you may have, and any bankruptcies related to your business or personal accounts. Additionally, frequency can include information about your payment patterns. Were you consistently slow or late with a payment? Did you start off paying bills late, but over time, decreased this behavior? These things will all be considered when calculating your score.
  • Monetary: This particular factor focuses on your credit utilization. For example, how much of your available credit is currently in use? Do you have a high ratio of delinquent balances compared to your total high credit or credit limits?

Intelliscore Plus Credit Score Range

The Intelliscore credit scores range from 1 to 100; the higher your score, the lower your ‘risk class’. Conversely, the lower your score, the higher your risk class and the harder you may find it to be approved for a loan or business credit card. The chart below outlines each Intelliscore Plus credit score range and its associated risk class and risk description.

Typical uses of Intelliscore

Much like PAYEX, Intelliscore may used by vendors and suppliers to judge your business when determining what terms to extend on (e.g., net 30, net 60, etc.) This is important because having more time to pay your bills can help you better manage cash flow.

Lenders and creditors can also consider your Intelliscore before extending lines of credit or loans to your business. You should aim to get to and maintain a PAYDEX score of 50 or higher to ensure you have access to capital which allows your business to remain solvent and grow.

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