How to Monitor and Improve Your Business PayNet Score

When it comes to securing financing for your business, preparation is critical. One of the most important things you can do to improve your chances of getting approved is to monitor and understand your PayNet score. This score is one measure of your business’s creditworthiness and is a factor considered by lenders when they evaluate your loan application.

An overview of your PayNet score

PayNet functions like a consumer credit bureau but for commercial lenders, providing credit assessments and industry insights on private companies. Its subscriber network of lenders shares historical loan and lease repayment information, which PayNet compiles, analyzes, and compares to industry peers' performance. Based on this analysis, PayNet assigns your business a MasterScore. This score reflects your business's size, past financial behavior, and other industry factors. Lenders use it to assess risk, which can significantly impact your ability to secure financing for business growth or equipment upgrades.

Why is monitoring your PayNet score important?

Monitoring your PayNet score is crucial for several reasons:

1. Improve your odds for approval. Lenders will review your score as part of their decision-making process. If you’re not sure your PayNet Score is high enough to qualify, connect with a local Equify Financial representative to talk about it.
2. Understand your creditworthiness. Knowing your score gives you an understanding of how lenders view your business. Your Equify Financial rep can help you determine what moves will improve your score the fastest so you can confidently apply for loans.
3. Avoid surprises. Knowing about any adverse changes to your score in advance is better than discovering issues when a lender denies your application. 

Now that you know why it’s important, let’s get into the details of monitoring and improving your PayNet score.

1. Get your PayNet score

The first step in checking your PayNet score is knowing where to access it. PayNet itself is a third-party credit reporting service that partners with many lenders. Business owners can’t directly access their PayNet score, but there are several ways to get it, including: 

• Ask your lender. If you've financed equipment or used a business line of credit in the past, your lender may already have access to your PayNet score and will share it with you upon request. 
• Purchase a report from credit reporting services. Third-party credit reporting services like Equifax or Experian often include PayNet scores in their business credit reports that you can purchase.

Once you know where to look, getting your score is as simple as requesting a report or subscribing to a monitoring service.

2. Understand what influences your score

Now that you can access your PayNet score, what does the number mean? Key factors that impact your score include: 

• Payment history: Consistently paying bills, loans, and credit obligations on time is one of the most significant factors. Late payments or defaults will negatively impact your score.
• Credit utilization: This factor refers to how much of your available credit you're using. If you're constantly maxing out your business credit cards or lines of credit, it can lower your score.
• Business size and age: Larger, more established businesses with a stable financial history tend to score higher. Newer or smaller companies may have lower scores simply because there’s less data available to assess.
• Industry risk: The risk factors associated with your industry can also influence your score. If your industry is considered volatile or high-risk, it could affect your score, even if your business is doing well.
• Outstanding debt: The amount of debt your business has and how you manage it plays a significant role. A large amount of outstanding debt or unpaid loans can lower your score.

You can improve your score by understanding the factors affecting your score before seeking financing.

3. Check for errors

It’s always a good idea to check your PayNet score report for inaccuracies. Reporting mistakes are rare, but they do happen. Any incorrect information in your report will unfairly lower your score. 

Here’s how you can check for errors:

1. Review your payment history. Ensure all payments are accurate and there are on-time payments reported as late or missed.
2. Check your credit utilization. Verify that your account's credit limits and balances are correct. Outdated or incorrect balances can impact your score.
3. Understand your industry classification. Make sure your business is classified correctly. If you're listed in the wrong industry, it could affect how risky your business appears to lenders.

If you find any discrepancies, contact the reporting agency or the lender directly to dispute the error and request a correction.

4. Work to improve your score (if needed)

A low PayNet score can result from many circumstances, though most commonly due to repeated late payment history or overextended credit lines with one or more lenders.  Limited time in business or lack of payment history, also known as having a “Thing File,” could also hurt a business’s PayNet score.

If your PayNet score isn’t where you want it to be, don’t worry. Follow these steps to improve your score before you submit your next application. 

1. Reduce outstanding debt. The first step to boosting your score is to lower your total amount of business debt. It is essential to make timely payments to all existing lenders. A financial advisor can help you prioritize which loans or credit cards to pay off first. 
2. Make payments on time. Late payments damage your score. Use the tools your lender provides, like automatic payments, or set a calendar reminder on your phone. 
3. Resolve tax issues. Quickly address any known outstanding tax liens or judgments. 
4. Limit your applications. Only apply for new credit when necessary. Your score lowers (temporarily) every time you apply for new credit. 
5. Keep an eye on your score. Regularly check your PayNet score to track improvements and ensure no new errors or issues arise.

By focusing on these actions, you can gradually improve your score and increase your chances of getting approved for financing.

5. Time your loan application wisely

Monitoring your PayNet score over time can give you valuable insights into when your business is in the best position to apply for financing. If your score is lower than you’d like, take the time to improve it before applying. On the other hand, if your score is good, now might be the right time to secure financing while interest rates and terms are favorable.

Watch and maintain your score

Monitoring your PayNet score and understanding its impact is crucial for securing business financing and accessing better loan options. While PayNet is a third-party reporting agency that Equify Financial uses for information, we can provide professional insights on why a customer’s PayNet MasterScore might be low and offer suggestions for improvement.

Read the full article to learn more about what affects your business credit score and how to improve yours.