Understanding the Creditsafe Business Credit Score

The Creditsafe credit score is a widely used business credit indicator (1–100 scale) that gauges a company’s risk of default. Higher scores mean lower risk.

Score Range and Interpretation

• Scale 1–100: Creditsafe uses 1 (highest risk) to 100 (lowest risk). Higher scores correspond to lower default probability.
• Risk bands: About 80–100 = very low risk; 40–70 = medium risk; below ~40 = high risk. For example, 90+ is typically very safe, while under 30 is a red flag

Data Sources and Model Inputs

Creditsafe’s score is built on a data-rich statistical model that combines diverse company information:

• Payment history: Millions of supplier invoices and payment records (from 85M+ tradelines) feed the model. The model tracks how many days a company typically pays past due (Days Beyond Terms, or DBT) and compares that to industry peers.
• Public/legal records: Official filings (bankruptcies, tax liens, court judgments, etc.) and company events (address or director changes) are collected from registries. New derogatory filings immediately raise a company’s risk profile.
• Financial statements: Key ratios from balance sheets and income statements are used. Weak profitability or high leverage will lower the score, while strong financials improve it. This data is typically only available for a small subset of companies.
• Business profile: Attributes like company age, size, industry sector and corporate structure are factored in. Generally, established firms score higher than very new or small firms.

The analytics team weighted these factors by analyzing past failures. The final score reflects the combined signal from all available data.

Causes of Score Changes

Score drops often result from:

• A spike in late payments (higher DBT).
• New bankruptcy, lien or judgment filings.
• Major financial losses or credit events.

A score improves when:

• The company pays more promptly (DBT falls).
• Old delinquencies or judgments age out of the data window.
• Stronger financial results or liquidity are reported.

Because the model emphasizes trends, gradual improvements (like steady on-time payments) raise the score slowly, while abrupt bad news causes quick declines. Monitoring these changes can alert credit professionals to emerging risks or improvements.