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Business Search returns two automated scores (KYB and Risk) with every completed search. These ratings help you make faster approval decisions without building complex rules. This guide explains what each rating means, how they’re calculated, and how to use them in your verification workflow. For an overview of Business Search, see Business Search: Basics. For complete verification workflows, see Business Search: Best Practices. International searches use the same rating scale with their own scoring factors — see International Business Search: Scores & Ratings.

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Scores vs. Ratings: A Quick Reference

Baselayer provides two types of evaluations to support different decision-making styles:
  • Scores: Numerical values (0-100) for granular analysis and custom thresholds
  • Ratings: Letter grades (A, B, C, F) for quick, consistent decision gates
Most customers use ratings for automated decisioning (simple and fast) while exposing scores to analysts for manual review cases (detailed and tunable). Note that the KYB score and the Risk score use different grade bands — each section below includes the scale for its score.

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KYB Rating & Score

The KYB rating evaluates the quality of the business verification search and initial company assessment.

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Key Factors Influencing KYB Scores

Note — Texas businesses: For Texas businesses, the KYB score also considers the business’s franchise-tax standing with the Texas Comptroller of Public Accounts, separately from its Secretary of State registration status, and the two count equally. The Comptroller often flags a business that has lost its right to transact business months before the Secretary of State does, so a business that is active with the Secretary of State but has forfeited its franchise-tax standing scores lower. When the Comptroller standing is unknown (for example, for tax-exempt entities), only the Secretary of State status is used. The standing is returned in each registration’s metadata.

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KYB Rating Scale

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Risk Rating & Score

The Risk rating identifies potential financial risk factors common in lending and payment processing evaluations. It incorporates broader signals around financial, operational, and behavioral risk, combining Baselayer identity data with liens, litigations, application velocity, industry patterns, and business age.

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Key Factors Influencing Risk Scores

Note: Risk scores incorporate data from optional products like liens, litigations, and website analysis. These products enrich risk assessment but aren’t required for baseline scoring.

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Risk Rating Scale

Note: A confirmed hit on the OFAC or BFC watchlists always forces the Risk score to 0 and the Risk rating to F, regardless of the score the model would otherwise compute.

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High-Severity Risk Flags

These scenarios carry disproportionately high predictive value within Baselayer’s identity and inquiry network.
The presence of any one of the following automatically lead the Risk Rating to C or F, depending on severity:
  • Bankruptcy proceedings, eviction actions, or class-action lawsuits filed within the last five years
  • High application velocity: more than four distinct-institution inquiries within seven days across the Baselayer Network
  • Watchlist hits on OFAC, CSL, CNS, or FBI lists. OFAC and BFC hits are treated as absolute: they force the Risk score to 0 and the Risk rating to F, overriding the computed score entirely. Which lists are screened follows your Account Settings
  • Recent tax liens, particularly those filed within the last five years
In these scenarios, Baselayer applies constraints to ensure consistent and conservative risk assessment.

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Additional Risk Contributors

The scenarios below are considered lower-severity flags. Individually, they may not significantly impact the rating, but multiple occurrences in combination can still lead to a C or F:
  • Time in business < 6 months, especially when paired with high inquiry velocity
  • Multiple medium-risk litigations within the last five years
  • A high volume of non-tax liens, inconsistent with the business’s operational age or size
  • Inconsistent application patterns observed across the Baselayer Identity Network (e.g., varying TINs, names, or addresses)
  • Low-quality KYB results - specially C or F KYB ratings
  • Website and online-presence red flags, such as inactive or parked domains, or lack of operational signals
These indicators are incorporated into the weighted model and may interact with other components to downgrade the final rating.

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Webhooks and Rating Updates

Because liens and litigations are requested after a search is first completed, Baselayer recalculates risk whenever new court or SoS data changes a business’s profile. When this affects the KYB or Risk score, Baselayer emits the webhook:
BusinessSearch.Updated
This ensures downstream systems stay aligned with newly discovered information (e.g., bankruptcy filed today, litigation discovered tomorrow, SoS status updated next week).

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Making Decisions with Scores & Ratings

  1. Automated Decision Frameworks
    1. A Ratings: Consider for straight-through processing
    2. B Ratings: Treat as verified, but establish certain risk limits
    3. C Ratings: Set thresholds based on your risk tolerance for specific data points, or manually review
    4. F Ratings: Consider for automatic enhanced review or rejection
  2. Manual Review Prioritization
    1. Focus reviewer attention on specific factors driving lower scores
    2. Use the granular components of the scores to guide additional verification steps
  3. Risk Policy Integration
    1. Incorporate both KYB and Risk ratings into your decision matrix
    2. Consider different weight allocations based on your business priorities

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Real-World Example

A financial services company might structure their initial onboarding rules as:

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Continuous Improvement

Baselayer continuously refines scoring models based on:
  • Emerging fraud and default patterns across the network
  • Regulatory changes and compliance requirements
  • Customer feedback and observed outcomes
If you’ve identified risk factors strongly correlated with fraud or default in your portfolio, share this with your Baselayer account manager to help improve risk assessment accuracy.

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Next Steps

Implement ratings in your workflow: Understand contributing factors: Handle edge cases:

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Need Additional Support?

Contact your Baselayer account manager for assistance with:
  • Customizing rating thresholds for your use case
  • Understanding specific rating outcomes
  • Sharing risk patterns to improve scoring models
  • Questions about implementation