If you are looking to establish a small business, or if you are already the owner of one, maintaining a good credit score is crucial. This blog offers a short summary of the important distinctions between your personal credit report and your small business credit report.
Your personal credit report begins when you are assigned a social security number, and is generated when you first apply and use credit – e.g. credit cards, bank, or auto loan. Your credit activity and creditworthiness are both evaluated by three major credit reporting agencies (Experian, TransUnion, and Equifax). When someone asks about your credit score, they are asking about the score that is generated from your prior and current credit activity. Personal credit scores range from 300 – 850, with anything over 775 generally considered excellent.
Conversely, a business credit report is not tracked with each credit card or car loan payment. In order to expand your line of credit, you need to strategically manage your information and ensure that your business payments to vendors and creditors are reporting that data to the major business credit reporting agencies Experian Business and Dun & Bradstreet. Business credit scores are indexed on a score of 1-100, with anything 80 or above considered top tier.
Importantly, even though your personal and business credit reports are separate, they are still connected in two ways:
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Parks Zeigler, PLLC – Attorneys At Law
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