Better Business Bureau, or BBB, reports and ratings are based on the history of customer complaints, the company's contact and ownership information, the type of business, length of time in business, advertising practices and licensing. Businesses are given a letter grade of A+ to F.
The complaint history portion of the report includes the number and type of complaints filed with the BBB and the company's response. The Bureau determines whether the company made a good faith and timely effort to resolve the complaint.
More recent complaints hold a greater impact on the business rating than older complaints. The BBB also considers the size of the business in relation to the number of complaints when determining the impact they have on the business rating.
Business types that commonly misrepresent their business or violate the law are issued a lower rating. Lower grades are also issued if the BBB receives information that the company does not meet the licensing requirements. The BBB considers advertising methods and penalizes companies who misrepresent their BBB standing or services offered.
Businesses receive a lower or no rating if the BBB lacks required information. The BBB also offers accreditation for businesses who meet the Bureau's standards of trust, transparency and honesty. Accreditation may increase the grade issued by the BBB, notes Consumer Reports.