Source
r/smallbusiness•
UsedToBsmart

The SBA Uses a Blended Score - so it is looking at both your commercial and your consumer credit history.

The SBA uses the FICO SBSS Score. This is a blended score that depending on items such as business structure (such as LLC or Sole Prop), number of employees, data availability, etc, etc - delivers a score that may be 100% based on commercial data or 100% based on consumer data or any combination in between.

This site does a decent job discussing the score:

https://www.nav.com/business-credit-scores/fico-sbss/

And for sole props, the commercial credit agencies do try and build credit reports for your company. If they pick up signals of active credit they will build a report. The company name should be set up as your personal name with a DBA, such as Smith, John DBA Everyday Painting, but sometimes they will just set it up using the business ha e as they may not have connected the ownership.

Posted Apr 20, 2020, 3:27 AM UTC

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hormiga79•

Are you aware of a free way to check this blended score? Not interested in paying $50 to Nav. Thanks!

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UsedToBsmartOP•

I wouldn’t spend the 50-either. Don’t NAV give the scores from the commercial agencies for free? I know they once did.

If they are offering the FICO score for 50-dollars I’d pass as well. I’ve not worked it’s that score in years, but it could be customized so what they provide may be nothing like what the SBA is using.

Also, in terms of “building” a credit profile, there is enough online to help point you in the right direction that paying for a credit builder service feels like a waste of money.

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Mullet_Happens•

Thanks for clarifying. I'm a sole prop that started my business last August. I had been slowly but consistently growing up until March. I have an EIN and did file my taxes for 2019. I haven't taken out a business credit card. I hope they'll take that into consideration.

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UsedToBsmartOP•

Responding to another post, I provided a link to an old scoring validation that highlight the scorecards the SBA used in the past. There is a consumer only scorecard. That is what they system should default to for a sole prop without a commercial credit profile.

Saying that it should be using a consumer only scorecard in your situation is no guarantee that’s what is happening - without access to their system we will never know the rules they have built in.

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Mullet_Happens•

Thanks, this is helpful. I hope there is some logic to the decision the SBA makes. So far it seems like we've received a lot of speculation but not much clarification from them.

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UsedToBsmartOP•

They are never going to provide their process. That would make it too easy to manipulate the system. Another thing that is adding complexity to understanding what they are doing is that two different SBA groups are managing these loans. So there is a completely different process for the PPP & EIDL loans.

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tfox-mi•

Any idea what score they're looking for there? I've read 160 is the normal, but it may have been reduced?

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UsedToBsmartOP•

No, sorry I don’t know.

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Prometheusmaximus23•

Thank you for this. I have attempted to explain this to many people who attempted to bash the idea and say they do not pull business credit and that they have been in business for 10+ years and still do not have a business credit report... people who want to be right make excuses to convince themselves they are right. Many of the credit denials that state unsatisfactory credit history or similar are likely due to the business credit side of the report they pull from Experian. You can have an 800 personal credit score but if something has been marked foul on your business or no file is found to verify the business it can spit out a denial. A+ for posting this

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UsedToBsmartOP•

I just found this older SBA validation of the SBSS online. This is not the current version used today, but may be good to use moving forward when posters are giving bad insight. It gives some insight into what elements it’s looking at from both a commercial and consumer standpoint:

https://www.sba.gov/sites/default/files/files/SBA%20-%20SBSS%206%20Validation%20Analysis_20150115.pdf

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