How to Check My EIN Credit: Everything You Need to Know
Checking your Employer Identification Number (EIN) credit provides you with insight into your business's creditworthiness.3 min read
2. What Is a Business Credit Score?
3. How Are Business Credit Scores Calculated?
4. How to Use Your EIN for Credit Purposes
5. Improving Business Credit Scores
6. How to Check Your Business Credit Score
Updated October 30, 2020:
Checking your Employer Identification Number (EIN) credit provides you with insight into your business's creditworthiness. Like a personal credit score, your business credit score reflects the likelihood of your company providing timely payments on its debts.
What Is an Employer ID Number?
An EIN is one type of tax ID the Internal Revenue Service issues to businesses. Like an individual's social security number, this nine-digit number helps the IRS identify and track payments to businesses with employees, including:
- Limited liability companies
What Is a Business Credit Score?
Like personal credit scores, businesses also have scores that show their creditworthiness to lenders. Because your business's credit score reflects your history of paying bills on time, banks and other lenders will use credit reports to consider approving your business for a loan or for another financing. These reports help them determine the likelihood that your business will pay them back the money they lend to you.
In addition to lenders, business credit scores tell your vendors and suppliers how likely you are to pay them for the products or the services they provide your business. Good credit scores also help your business qualify for lower rates on business insurance and some loan options.
How Are Business Credit Scores Calculated?
Business credit scores are calculated based on your company's financial history, such as:
- Credit utilization rate
- Debt payment history, including outstanding debts
- Length of credit history
- Bankruptcies, liens, and judgments
- Size of your company
- Industry risk.
How to Use Your EIN for Credit Purposes
To establish business credit using an EIN, your business must apply for a DUNS number. This number is issued by the credit bureau, Dun & Bradstreet. You must provide information such as:
- Your company's legal name
- Business structure
- Year of establishment
- Number of employees
- Any alternate names your company uses (“doing business as” names).
Improving Business Credit Scores
Once your company obtains a DUNS number, the following are some suggestions that will help your business establish a good credit score:
- As a sole proprietor, your personal financial information is combined with your business's financial information. As a result, any missteps in your personal credit could damage your company's credit score. Structuring your business as an LLC or corporation will help separate your personal credit from your business credit.
- Pay vendors and suppliers in a timely manner. Use your EIN when applying for credit trade accounts with your vendors and pay the amount in full prior to the due date.
- Build your company's credit scores by using your EIN to apply for a business credit card. Make any necessary purchases and repay the amount in full prior to the due date. Alternatively, you can use your EIN to apply for a small business loan, which you should repay in full prior to the due date. As another option, you can use your EIN to apply for a small business loan, which you should repay in full prior to the due date.
- Contact any businesses that your company has credit with and ask where they report that your company has made its payments on time. This lets you know which business credit reports you need to monitor. If you discover that not many of these businesses are reporting your good credit, consider opening accounts with companies that do report your business's good credit to reporting agencies.
How to Check Your Business Credit Score
Your business should periodically monitor its credit score and make any updates or corrections as needed. The primary credit agencies that businesses use for credit reports are:
- Dun and Bradstreet: Often used by vendors and suppliers to evaluate trading terms with your business. This score reflects the timeliness of your company's bill payment history.
- Experian: Often used by lenders when considering your business for loans or lines of credit. This score predicts the likelihood of your business being delinquent with repayment within the next year.
- Equifax: Often used by vendors, suppliers, and lenders. This report provides a credit score, a credit summary, an analysis of your company's payment trends, and a listing of public records, such as bankruptcies, liens, or judgments.
If you need help with how to check your EIN credit, you can post your legal need on UpCounsel's marketplace. UpCounsel accepts only the top 5 percent of lawyers to its site. Lawyers on UpCounsel come from law schools such as Harvard Law and Yale Law and average 14 years of legal experience, including work with or on behalf of companies like Google, Menlo Ventures, and Airbnb.