Different than Consumer Credit Scores

Business Credit Scores Are VERY Different than Consumer Credit Scores

Business credit scores are based only on if the business pays its bills on time. As a result, a business owner can get credit much faster using their business credit profile versus their personal credit profile.

Personal Credit Scores come from five factors:

  • Payment History 35% 
  • Utilization 30% 
  • Length of Credit History 15% 
  • Accumulation of New Credit 10%
  • Credit Mix 10%

Business credit scores mainly come from payment history alone. Consider that the most popular score in the business world is the PAYDEX score from Dun & Bradstreet. An 80 means that payment is prompt. Consumer credit scores are made up of 5 factors. It can take years of well-disciplined borrowing to get excellent scores. Business credit scores are mostly based on payment history. So, as long as you pay bills as agreed, you will have an excellent score.

With Experian and Equifax, you can have just one account reporting and you will have a business credit score. Most vendors have your account reported to the business reporting agencies in 30 – 90 days. This means you can build a business credit profile and get an excellent credit score in little time.

The credit scores in the business world report on your business and assesses different forms of risk like the risk of filing for bankruptcy. For
example, Experian’s Intelliscore considers more than payment history. So does the Business FICO score. But the main scores used today including
the Equifax Small

So, as business credit is used, it has no adverse impact on the owner’s consumer credit because it’s not reported to consumer agencies. This means using the account, even over 30%, won’t have any adverse impact on personal credit scores. 

And there are no inquiries on the personal credit when you apply for business credit if you don’t supply your SSN. 

30% of your total consumer credit score comes from utilization. So, if you use your personal credit to get credit cards for your business, if you use those cards you will lower your scores. Using more than 30% of your limit WILL result in a score decrease.

The credit scores in the business world report on your business and assesses different forms of risk like the risk of filing for bankruptcy. For example, Experian’s Intelliscore considers more than payment history. So does the Business FICO score. But the main scores used today including the Equifax Small. Business Risk Score and D&B PAYDEX score use payment history as the only factor. And other scores like Intelliscore use it as their primary factor.