What is a bad credit score? Business & personal ranges explained

Your credit scores — both personal and business — can directly affect your ability to secure financing, get favorable terms with vendors, and grow your company. A bad score on either type of credit report can block access to capital or result in higher interest rates that eat into your profits.

Find out what "bad credit" means to help you identify problems early and take action.

What is a bad business credit score?

Business credit scores are based on information from business credit bureaus Dun & Bradstreet, Equifax, or Experian. Each credit bureau creates its own credit scoring models with individual score ranges.

See a detailed list of business credit score ranges here. 

Here are some of the most well-known business credit scores and their risk ranges:

Dun & Bradstreet (D&B) PAYDEX Score

The D&B PAYDEX^® score ranges from 0–100 and focuses specifically on trade payment performance with vendors and suppliers. 

• 80–100 (Good): Low risk. Score of 100 means payments are made 30 days before terms, while 80 indicates on-time payments
• 50–79 (Fair): Medium risk. Score of 70 means paying 15 days late, while 50 indicates 30 days late
• 0–49 (Bad): High risk. Payments are 60+ days past due, with scores below 40 indicating severe payment problems

Experian Intelliscore Plus

Experian Intelliscore Plus^sm is Experian’s business credit scoring model. The first two versions use a 1–100 scale that predicts the likelihood of serious delinquency:

• 76–100: Low risk (Excellent)
• 51–75: Low-medium risk (Good)
• 26–50: Medium risk (Fair)
• 11–25: High-medium risk (Bad)
• 1–10: High risk (Very bad)

Equifax Business Delinquency Score

Equifax offers several business credit scores. The Equifax Business Delinquency Score^TM ranges from 101–662, predicting the likelihood of severe delinquency within 12 months:

• Higher scores: Lower risk
• Lower scores: Higher risk of payment problems
• Scores near 101: Indicate high risk of delinquency or bankruptcy

What is a bad personal credit score?

Most personal credit scores range from 300–850, with most scoring models following similar risk categories. Every lender decides for itself what is considered good or bad credit, but there are general guidelines that may give you an idea of how your credit may be viewed by lenders. 

Depending on the lender, scores below the 600–650 range may be considered “poor” or "bad credit" and will often significantly limit your financing options.

Bad business credit vs. bad personal credit: What's the difference?

How bad business scores affect funding & vendor terms

Bad business credit scores can create a ripple effect across your business operations. Even businesses that bootstrap and don’t take outside funding may feel the effects. 

Potential impacts may include: 

Financing challenges:

• Higher interest rates on loans and lines of credit
• Shorter repayment terms
• Collateral or personal guarantees required
• Smaller loan amounts
• Limited access to SBA loans 

Vendor relationships:

• Shorter payment terms (net-10 instead of net-30, for example)
• Deposits or prepayment required
• Higher prices due to perceived risk
• Difficulty establishing new supplier relationships

Operational costs:

• Higher insurance premiums
• Larger security deposits for utilities
• Limited equipment leasing options
• Challenges landing large corporate clients
• Difficulty securing prime commercial real estate

Top reasons for bad business credit scores

Understanding why your scores may drop can help you avoid common pitfalls:

Payment history problems: Late payments to vendors, suppliers, or lenders get reported and damage scores quickly. Even being a few days late can impact your business credit scores.

Thin credit files: New businesses often have limited credit history, making it difficult for scoring models to assess risk accurately. Low credit scores may be the result. 

High credit utilization: Using large portions of available credit lines can signal financial stress with some scoring models.

Public record issues: Tax liens, judgments, bankruptcies, or UCC filings are considered derogatory and can severely impact scores.

Industry risk factors: Some industries are viewed as inherently riskier, which can affect baseline scoring. Risk is usually associated with the business industry codes, SIC or NAICS codes, so check the one listed on your credit report for accuracy. 

Mixed personal and business finances: Using personal credit for business expenses prevents building separate business credit history. Learn how to separate them here.

Steps to improve a bad business credit score

Rebuilding good business credit can take time and some effort, but these strategies may help:

1. Open and maintain 3+ reporting tradelines: Work with suppliers and net-30 vendors who report to business credit bureaus. Focus on maintaining these relationships with consistent, on-time payments. Tip: Nav’s net-30 vendor list can help you find vendors that report payment history
2. Pay on time, or early: Paying accounts that appear on your business credit reports on time is essential. Paying 10–15 days before due dates may boost your D&B PAYDEX^® Score, which rewards early payments.
3. Lower utilization on revolving credit: Aim to balances below 20%–30% of available limits on business credit cards and lines of credit to avoid high utilization. 
4. Dispute incorrect public filings: Review your reports regularly and dispute any inaccurate liens, judgments, or other public record items that don't belong to your business. Review UCC filings carefully, as lenders don’t always update them when they are paid. 
5. Monitor credit scores monthly: Regular monitoring helps you spot problems early and track improvement progress. Services like Nav Prime provide ongoing monitoring across multiple bureaus.

Steps to improve a bad personal credit score

Since many business lenders also check personal credit, it’s helpful to make sure your personal credit is as strong as possible. 

How you will approach building or rebuilding your credit will depend on what’s bringing down your scores. But almost everyone can benefit from focusing on the fundamentals, also known as the five FICO factors (though they apply to VantageScore scores too):

Payment history: Get accounts that report to personal credit, then pay on time every month. Paying early may reduce your reported balance, improving your utilization ratio, which can improve credit utilization, but otherwise you don’t get “extra credit” or paying early here. 

Debt: Try to keep credit card balances below 20%–30% of your credit limits to avoid high utilization. On personal credit, this can be a significant factor so pay close attention to balances. 

Mix of credit: Consumers with the highest credit scores often have a mix of revolving accounts (like credit cards or charge cards) and installment account (like mortgages, auto loans, or credit builder accounts).

Age of credit: Most credit scoring models calculate how long you’ve had credit by looking at the oldest account, newest account, and the average age of all accounts. A well-established credit history is considered better. 

New credit/inquiries: Hard inquiries may drop your credit scores by several points. When applying for credit, try to keep this in mind and only apply for credit cards or loans you really want, and those you’re more likely to get. 

How to monitor personal & business credit

If you don’t check your credit on a regular basis, you won’t know what’s on your credit reports, whether your scores are moving in the right direction, and more importantly, whether you could be a target of identity theft. 

Ultimately it’s up to you to check your business and personal credit reports to see whether they are accurate and how they represent your creditworthiness, or that of your business. It’s your financial reputation that’s on the line, so make sure you know where you stand. 

Free options:

• Nav is one of the only sources for free credit summaries and grades for both personal and business credit
• Consumers can get free copies of their personal credit reports at AnnualCreditReport.com

Paid monitoring:

• Nav Prime offers a way to monitor business credit data based on information from Dun & Bradstreet, Experian, and Equifax. Business credit scores may be updated monthly, depending on data availability and bureau reporting practices.
• Individual business credit reports can be purchased directly from Dun & Bradstreet, Experian, and Equifax

Credit reports may contain mistakes that bring down your scores. They can also provide an early warning of identity theft. 

Checking yours regularly helps you spot and dispute inaccuracies and will help you check your progress toward better credit. 

Frequently asked questions

What is considered a bad business credit score? 

Ultimately that question is up to the lenders, as they decide what level of risk they will accept. As a general rule of thumb though, D&B PAYDEX^® Scores below 50, Intelliscore Plus scores below 26, and Equifax scores on the lower-third of the score ranges will often be considered very high risk by lenders.

Also keep in mind that some lenders aren’t interested in scores; they check credit for red flags such as collection accounts or judgments, for example. 

How can I improve a bad D&B PAYDEX Score fast? 

Business owners who want to build stronger credit with Dun & Bradstreet may find it helpful to pay their largest invoices 10–20 days early, since the D&B PAYDEX^® Score system is dollar-weighted. Establish new net-30 vendor accounts that report to Dun & Bradstreet and paying on time may help as well. 

Does a bad personal score hurt business loan approval? 

Yes it can. Many small business lenders evaluate both personal and business credit, especially when a business is young or doesn’t have strong revenue. A bad personal score can result in loan denial or higher interest rates, even with good business credit.

Can an LLC have a bad credit score? 

Yes. Any business entity (or sole proprietorship) with credit accounts can develop both good and bad credit scores based on payment history and other factors reported to business credit bureaus.

How long does it take to fix bad business credit? 

It really depends, but business owners may see faster results than consumers with bad credit. The reason? Many bad business credit scores are due to a lack of accounts reporting. With new reporting tradelines and consistent early payments, you may see progress within as little as 90 days. Complete recovery from serious issues may take a year or longer, depending on what’s bringing down your scores.