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Some Major Differences Between Personal and Business Credit

Credit Suite
January 30, 2016
Differences between Personal and Business Credit Suite

What Are the Differences Between Personal and Business Credit?

Did you know there are substantial differences between personal and business credit?

What’s Business Credit All About?

There are three main reporting agencies in the consumer world. They are Equifax, Experian, and Trans Union.  In the business world Equifax and Experian are still players. But it’s Dun & Bradstreet which is the major player.

Discover our Get Business Credit guide, with everything you need to know about building credit for your business.

What About Personal Credit?

In the consumer world the three reporting agencies have a similar amount of consumer records. This has to do in large part with them splitting up the smaller reporting agencies between them over many decades.

Differences Between Personal and Business Credit: Dun & Bradstreet

But in the business world, D&B has more than 10 times the records of the next closest reporting agency. So
it’s different from consumer credit. Because in the business credit world there really is one major player. And then there are two other much smaller ones.

Discover our Get Business Credit guide, with everything you need to know about building credit for your business.

Differences Between Personal and Business Credit: Personal Credit Scoring Factors

Personal credit scoring is based on 5 main factors. So, these are payment history, utilization, length of credit history, accumulation of new credit, and credit mix.

These multiple factors make it hard for an individual to really have a lot of control over their credit score.

Contrast With Business CreditDifferences between Personal and Business Credit Suite

But in the business world, scores are mainly coming from only one factor. It’s how the business pays its bills. If the business pays its bills on time, a very good credit score is its reward. This makes it much easier and faster for a business to build credit than it takes a consumer to do.

A business can actually build a solid credit profile and score within 90 days or less. And then they can then start qualifying for $10,000 major credit cards. So, they can do so within 6 months.

But Personal Credit is Different

In the consumer world, it takes a full 6 months to even get a credit score. And it can take many years of time for a consumer to get high limit credit cards.

Plus, with consumer credit, the consumer is liable for the debt. With business credit the business itself is liable for the debt, not the business owner.

Approval Rates Are Different

Another big difference between personal and business credit is that business credit approvals also are much higher than consumer approvals. On average, approvals are 10-100 times higher on the business side versus consumer side.

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Differences Between Consumer and Business Credit: The Upshot

So, these are just some of the major differences between personal, and business credit. Knowing this you can easily see the considerable benefits any business owner will enjoy by having a strong personal credit profile built. But they also need a strong credit profile for their business as well. At Credit Suite, we can help you build your business credit, and take it to the next level.

Discover our Get Business Credit guide, with everything you need to know about building credit for your business.

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    1. Hi Jennifer, if the business has some good revenue of at least 10k consistently every month you can get funding even with challenge credit. Otherwise you’ll need at least 680 credit score or have a credit partner with that credit score. You can check different funding options and requirements to apply at creditsuite.com/business-loans

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