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Business credit monitoring services: What they are, how they work; are they worth it?

A business credit score drop can negatively impact your ability to get favorable financing terms – and that’s where monitoring services can help

Summary

Business credit monitoring services check for changes to your business credit profile that could cause your scores to rise or drop – including the opening or closing of new credit lines and your business payment history. Here’s how they work and how to choose the right one for you.

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In business, a strong credit profile matters for a healthy bottom line. Business credit monitoring services are a way to track changes to your business credit reports that could impact your scores.

Gerri Detweiler, education director for Nav, says monitoring business credit scores is one of the most important things you can do as a business owner.

“Business credit scores can impact the ability to get financing or favorable payment terms, low insurance rates and even certain business deals,” says Detweiler.

There are several companies that offer business credit monitoring. These tips can help you compare credit monitoring services for business and decide which ones are worth your time.

See related: Best business credit cards

How business credit monitoring works

To understand business credit monitoring, it helps to know how business credit scores operate. Business credit scores are different from personal credit scores in terms of how they’re calculated and what they measure.

“While personal credit scores are tied to an individual’s Social Security number, a business credit score is connected to the business’s employer identification number,” says Paola Garcia, vice president and small business advisor at nonprofit lender Excelsior Growth Fund.

Business credit scores range from 0 to 100. The three leading business credit score models are:

  • Dun & Bradstreet’s PAYDEX Score
  • Experian’s IntelliscorePlus
  • Equifax’s Business Payment Index

Garcia says that generally a score of 65 or better is considered good for business credit for these models. FICO also offers a Small Business Credit Score, which ranges from 0 to 300. This score is used by the Small Business Administration to prescreen for business loans.

When business credit score monitoring makes sense

Business credit monitoring services check for changes to your business credit profile that could cause your scores to rise or drop. That includes things like the opening or closing of new credit lines and your business payment history.

“By using credit monitoring systems, it’s possible to track and trend changes in your business credit, which provide insight into the impact your actions have on your credit,” says Jared Weitz, CEO and co-founder of small business lender United Capital Source.

In other words, business credit monitoring can tell you what you’re doing right (or wrong) when it comes to establishing and using business credit.

See related: 6 ways to maintain a good business credit score

Comparing business credit monitoring services

There are four primary companies that offer business credit monitoring:

  • Nav
  • Experian
  • Equifax
  • Capital One

The scope of what they monitor for and the cost to track your business credit varies. This chart highlights the key benefits, features and fees associated with each one:

What’s IncludedBest FeatureCost
Nav
  • Personal credit report and credit summary from Experian.
  • Letter grades and reports for business credit from Equifax, Experian and Dun & Bradstreet.
  • 24/7 business credit monitoring and alerts.
  • With Nav, you can view your business and personal credit reports together.
  • Free
Equifax Business Credit Monitor
  • Unlimited Equifax credit reports on monitored businesses.
  • Business credit monitoring alerts for new inquiries, derogatory marks and bankruptcies.
  • Equifax Score Drop Alert notifies you of any negative risk score change of 20 points or more.
  • $19.95 per month
Experian Business Credit Advantage
  • Unlimited access to your Experian credit ranking score and online business credit report.
  • Automatic tracking of changes to your business credit file.
  • 24/7 monitoring for significant business credit changes or inquiries.
  • Experian monitors for a wide range of activity, including business address changes, credit score changes, new tradelines, liens, public records and collections.
  • $179 annually
Capital One Business CreditWise
  • Free business credit report from LexisNexis Risk Solutions.
  • 24/7 business credit monitoring.
  • Free

The key differences between the different business credit monitoring services are where they pull business credit information from and the cost.

  • For example, both Nav and Capital One are free to use.
  • In terms of what they cover, Nav could be considered the more comprehensive of the two since it includes business credit information from Equifax, Experian and Dun & Bradstreet.
  • Capital One, however, offers something unique that other business credit monitoring services lack: a way to dispute business credit reporting errors.

“When you utilize a monitoring service, errors will be quickly evident,” says Weitz. Errors – such as payments that aren’t being reported properly or an account that doesn’t belong to your business – could drag business credit scores down.

While the Federal Trade Commission spells out an exact process for disputing personal credit report errors, the guidelines for business credit disputes are fuzzier.

“There’s no federal law that requires business credit reporting errors to be promptly investigated,” says Detweiler. “However, if you file a dispute with the commercial credit reporting agencies, they will generally contact the source and resolve the error, if there is one.”

Business CreditWise can make it easier to dispute an error if one is present on your business credit report, even if you don’t have a Capital One business credit card.

See related: 5 things you should know about business credit scores

Are business credit monitoring services worth it?

In terms of what business credit monitoring services can do for you, the benefits are apparent.

“Monitoring services can improve insight into what’s impacting your score and how best to improve it,” says Weitz. “Monitoring your credit may also catch identity theft and reveal who’s inquiring about your business.”

That’s important since businesses can become a target for identity theft just as easily as individuals can. If your business credit information is stolen, an identity thief could use it to make fraudulent purchases or take cash advances against your business credit cards.

The better question might be whether it makes sense to pay for business credit monitoring. Both Equifax and Experian’s paid services focus exclusively on their respective credit reports and scores. And they offer tools and insights that can help you improve your business credit profiles.

But the cost could be a hurdle if you’re trying to preserve cash flow in your business. Signing up for Nav and Business CreditWise accounts is a more cost-effective way to keep tabs on business credit.

Keep your business credit score healthy

Business credit monitoring services can encourage credit score improvements if you’re practicing good habits. These tips can help boost business credit.

Separate business and personal spending

“Co-mingling personal and business funds makes business deductions and taxes more complicated and you don’t want negative events in your personal finances to potentially impact your business,” says Garcia.

Consider opening a business checking account and a business credit card if you don’t have those already. With business credit cards, take time to compare the rewards, annual fees and interest rate. And if you can pay in full each month, you may want to opt for a business charge card instead.

Be timely with payments

Payment history is the number one factor that impacts business credit scores and it pays to be punctual.

“With business credit, a payment that is just one day late may be reported as late,” says Detweiler. “So, it’s crucial to set up systems so that you don’t miss a payment.”

Get on good terms with your vendors

Your suppliers may automatically report payment history to the commercial credit bureaus. Weitz says if you have a vendor or supplier that doesn’t report, you could always ask them to do so. You may need a solid payment history, however, to bolster your request.

A positive payment history can yield one other important benefit, unrelated to business credit.

“Vendors will often offer trade discounts to accounts that pay on time or early,” says Garcia.

Editorial Disclaimer

The editorial content on this page is based solely on the objective assessment of our writers and is not driven by advertising dollars. It has not been provided or commissioned by the credit card issuers. However, we may receive compensation when you click on links to products from our partners.

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