Comparing Business and Personal Credit Scores

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What Is Business Credit vs. Personal Credit?
Business Credit Score
Experian Dun & Bradstreet Equifax
Current debt Payment habits Available credit Trade credit Liens and bankruptcies Time in business Type of industry
Personal Credit Score
Transunion Experian Equifax
Payment history Total debt owed Credit utilization (percentage of credit available that is currently being used) Length of credit history Types of credit (e.g., credit cards vs. loans) New or recent credit
How Do Business Credit Scores Work?
How Do Personal Credit Scores Work?
Key Differences Between Business and Personal Credit
Corrections
Transfers
Capacity
Pros and Cons of Keeping Personal and Business Credit Scores Separate
Pros
If your personal credit is weak, establishing good business credit can help qualify for loans you wouldn’t otherwise be able to get.
Many lenders require you to have both personal and business credit scores in order to qualify for financing.
Having business credit helps you avoid personal liability for your business’s debts.
Keeping business and personal finances separate makes bookkeeping easier.
Your business will look more professional when you pay for business expenses with dedicated business funds.
You may need business credit in order to get business insurance.
Cons
There are fewer legal protections for business credit, which can make it more difficult to get any mistakes on your credit report corrected.
If you sign a personal guarantee for a business loan, you’ll still be personally responsible, even if you have worked to establish separate business and personal credit.
Business credit cards often come with higher interest rates and fees than personal credit cards (though you may be able to find a low, or even a zero, introductory rate).
Tips for Keeping Personal and Business Credit Scores Separate
Open Credit Lines With Vendors
Choose Your Business Structure Carefully
Create a Business Credit File
Open a Separate Business Bank Account
Apply for a Small Loan
Get a Business Credit Card
How Can Personal and Business Credit Affect Each Other?
The Takeaway
Frequently Asked Questions
About the Author
Susan Guillory is the president of Egg Marketing, a content marketing firm based in San Diego. She’s written several business books, and has been published on sites including Forbes, AllBusiness, and Cision. She enjoys writing about business and personal credit, financial strategies, loans, and credit cards. Follow her on Twitter @eggmarketing.
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