Business Credit Score Part II
What is The Secret Business Credit Score?
It is your Experience Modification Factor (E-Mod, Mod, X-Mod, etc). During all of my Workers Comp presentations, I pointed this out. If it is a longer presentation, I usually go through how E-Mods are calculated.
If you think about it, even your personal credit has a score. I usually equate a score of 692 with an E-Mod of 1.0. That means you are average, or you have had an average amount of Workers Comp claim results compared to others in your industry if your company has been classified properly with the correct classification codes.
Anything below 1.0 is the same as having a credit score of above 692. That means a score of 750 is similar to an E-Mod of .70. If you have an E-Mod that low, you will have more insurance carriers bidding for your business, just as you would have more banks interested in you with a credit score of 750. Your company will pay lower Workers Comp premiums just as you would pay lower credit terms on a loan.
An E-Mod of 1.0 though, if compared to your grades in school, would be a “C“. Is a C acceptable to you? How do you get to an “A“?
Does that all sound easy and direct? Well, it is just not that easy.
Check with me on the next post and I will tell you how Workers Comp E-Mods are 10 times more difficult to improve or have errors corrected than with your D&B report or your personal credit score.
By the way, if you are reading this post, you have taken the first step to improving what you pay for Workers Comp services including your Workers Comp Credit Score better known as an Experience Modification Factor.
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