The ‘Hidden’ Credit Score All Business Owners Should Know About

The ‘Hidden’ Credit Score All Business Owners Should Know About

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When you login into your free account at Nav, you get instant access to your personal and business credit scores from Experian. These are important indicators of your personal and business financial health, but it doesn’t give you a complete picture. If you want a loan backed by the Small Business Administration (SBA), you’ll need a good SBSS score. Read on to learn more about this hidden credit score, and how you can improve your SBSS score.

What is the SBSS score?

SBSS stands for Small Business Scoring Service. It is a product from Fair Isaac Corporation, or FICO, that developed the popular FICO credit score for individuals. The full name of the SBSS score is “FICO® LiquidCredit® Small Business Scoring Service.” What a mouthful!

Business credit scores come in several flavors. With a free Nav account, you can view your Experian business credit score. Upgraded accounts get access to their Dun & Bradstreet score and SBSS score as well. As of this writing, Nav is the only place you can securely view your FICO SBSS score online.

Many business owners have no idea that their business has a credit score at all, let alone the more obscure SBSS score. However, SBSS scores have an important role in small business credit.

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The SBSS score ranges from 0 to 300. Like other credit scoring methods, a higher score indicates better credit health while a lower score indicates new or bad credit.

Why Your SBSS Score Matters

You may think that if you have not heard of the SBSS score, it isn’t important to you or your business. If you never want to borrow funds, open a business credit card, or raise capital for your business, you may be right. But if you ever want to borrow funds to grow your business, your SBSS score may come into play.

SBA loans are the biggest reason you may need your SBSS score. These popular loans are guaranteed by the Federal government, so banks are willing to lend for SBA loans at a lower rate than they would for loans not backed by the government. Depending on the program that fits your business needs, you can borrow up to $5 million for working capital, expansion, and equipment purchases.

If you are interested in an SBA loan, check your SBSS score first to make sure you qualify, then reach out to your favorite bank or credit union to ask about their SBA loan options. SBA loans are available through banks, credit unions, and specialized business lenders.

Outside of the SBA, your SBSS score still matters. More than 7,500 lenders use the FICO® Small Business Scoring Service score when reviewing loans, whether they are SBA related or otherwise.

What Is a Good SBSS Score?

If you sign up for a premium Nav account and grab your SBSS score, you’ll find your score on the previously mentioned 0 to 300 scale. But what makes for a good SBSS score?

The SBA requires pre-screening all applicants based on their credit score before starting the full review. To pass the screening today, your business needs an SBSS score of 140 or above. The SBA has used the SBSS to rate applicants since 2014, so it is a newer scoring model than the traditional FICO score for personal use.

Many lenders don’t want you to simply qualify with a minimum score for approval. Many banks consider a score in the 140 to 180 range as good enough to qualify. Some lenders prefer a minimum score of at least 160 to 180 for their lending programs.

How to Improve Your SBSS Score

The SBSS score is possibly the most important business credit score today. This model draws on multiple data points from your personal finances and your business to calculate your score.

Raising your FICO SBSS score is simple, but not always easy. You should follow all of the common advice to improve your personal score while simultaneously ensuring your business score is reported correctly and you are doing everything there to pay early and prove your credit worthiness.

Because the SBSS score draws on your personal credit score, you should always take the following steps to keep your personal credit score high:

  • Pay every bill on time
  • Keep revolving balances low
  • Never miss a minimum payment

If you do those three things consistently for seven years, you should have a near perfect credit score. If you have to fix your personal credit score, follow those steps and pay off any credit cards and lines of credit as quickly as possible.

For your business credit score, you may need to do a little more work. But know you are not alone. Nav is here to help you improve your business credit score and the details behind it.

If you have a business credit card or any existing business loans, log into Nav to ensure all loans are properly reported. A credit report with no details might as well be a zero credit score in the eyes of many lenders. Then, work with your vendors to ensure they are reporting your early and on-time payment history to the credit bureaus, which further boosts your score.

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Nav is the ONLY source for businesses to see the #1 business credit score used by the SBA—the FICO SBSS Score. Get your FICO SBSS score with a Nav account.

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About the Author — Eric Rosenberg is a finance, travel, and technology writer originally in Ventura, California. When away from the keyboard, Eric he enjoys exploring the world, flying small airplanes, discovering new craft beers, and spending time with his wife and little girl. You can connect with him at his own finance blog Personal Profitability.

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  • CL Jones

    Credit scoring was designed to aid in funding potential loan products for consumers. Unfortunately Trans Union, Equifax, and Experian focus more on earnings by keeping consumer scores low with substandard products. This hurts economic systems and forces a majority of consumers to embrace extremely high interest rates. We were subjected to chapter 7 bankruptcy in 2010 due to loss of income and poor economy. We have struggled to establish our selves over the past eight years never having opportunity to increase our credit score. We always paid our bills on time , though we never get ahead. Credit bureaus are the current debtors prison, where you are a number not a working individual. Somehow with continued faith and the people taking a stand these abusive practices will be put to bed once and for all. We also suffered Equifax data breach and still they refuse to send us a copy of our credit report and keep publising low scores along with trans union and Experian.