Bi-directional arrow

How Business Credit Score is Calculated

by OnDeck Australia,   Aug 15, 2023

What is a business credit score? 

Your business credit score is a numeric value between 0-1,200 and is derived from your business credit profile. It is a rating of how credit-worthy your business is, and it is used by lenders to assess your business’s ability to repay a business loan. Business credit scores work in a similar way to a personal credit score. 

When calculating a business credit score, the agency will look at several factors that indicate your financial health and ability to repay loans. These factors include payment history, debt levels, industry risk, length of credit record, and more. Together these make up a business credit file and are refined into a credit report that summarises your business’s ability to repay potential lenders and investors. How relevant each of these factors are depends on the credit scoring model being used by that particular credit reporting agency. 

Learn more about how your credit score affects your business. 

How are business credit scores calculated? 

Business credit scores are calculated by credit reporting agencies like Equifax and Veda.  

It’s important to check your business credit regularly and keep an eye out for any errors or inaccuracies that may affect your score. Make sure you always pay bills on time, take care of any debts, and maintain a healthy ratio of available credit. Controlling these factors can make a significant difference in your business’s credit score over time. 

The higher your business credit score, the more attractive you will look to lenders when applying for a loan or other financing.  


You can check your business credit rating for free by using our Know Your Score tool. 

Factors that determine your business credit score 

Payment history 

Your payment history is one of the most important factors in calculating a business credit score. Lenders will look at how you’ve managed your payments to other businesses and creditors, and whether you have any late or missed payments. Paying all bills on time is essential for maintaining a good credit rating.  

Current debt levels 

Your current debt levels are another factor that will be considered when calculating your credit score. Lenders want to see that you can manage your debts and still make payments on time. maintaining a manageable debt-to-equity ratio will help you keep a healthy credit score. 

Type of credit used 

The type of credit used is also important for lenders. Using a variety of different types of credit, from one-off sums like business loans to revolving lines or credit such as business credit cards. Lenders like to see you’ve demonstrated being able to manage multiple accounts of different types.  

Industry risk 

Lenders will not only look at the amount of debt you have, but the type as well. Depending on the industry you operate in, lenders may view some types of debt as riskier than others. For example, a business operating in an industry with high levels of risk or volatility such as tech start-ups may be seen as higher risk compared to one operating in a more stable industry like retail.  

Length of credit history 

Your length of credit history is another important factor that lenders will consider. Establishing a long and consistent track record of responsible borrowing over the years will make you more attractive to potential lenders when applying for financing. 

Hard inquiries 

Hard inquiries are also considered when calculating a business credit score. A hard inquiry is what it’s called when you apply for financing and the lenders look at your credit history and make an inquiry on your file.  

Multiple hard inquiries in a short period of time may affect your business’s credit score negatively. It’s therefore important to only apply for loans or other lines of financing when you are sure you can manage the payments. Sometimes multiple inquiries are made for a single purchase, for example when you need a property loan, when this happens only 1 of them is counted. 

Inquiries for preapproved credit offers or for periodic reviews based on existing debts are not taken into consideration when making credit score calculations. 

You can also use our Know Your Score tool to check your credit score for free and without leaving a footprint that could affect it. 

What is a good business credit score? 

A good business credit score is any score that is above 700. Having a good credit score will make it easier to apply for financing and other benefits, such as better terms or more favourable interest rates.  


OnDeck business loans have a minimum credit score requirement of 500, so long as you have been in business for at least 12 months, have a gross annual turnover of over $100,000, and haven’t had any prior bankruptcy, then you are eligible to apply for a business loan of up to $250,000. 



This article is for general information purposes only. Content may belong to or have originated from third parties and OnDeck takes no responsibility for the accuracy, validity, reliability or completeness of any information. 
OnDeck is not a financial adviser. You should consider seeking independent legal, financial, taxation or other advice to check how this information relates to your unique circumstances. OnDeck is not liable for any loss caused, whether due to negligence or otherwise arising from the use of, or reliance on, the information provided directly or indirectly, by use of this website. 


Get Started