A PRESENTATION ON BUSINESS AND CREDIT

THE NUTS AND BOLTS OF CONSUMER AND BUSINESS CREDIT REPORTING

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Business Credit Reports Online

Immediately run a credit check on any company, including your own.

Why You Might Have Two Credit Reports

Business Credit and Personal Credit

Your personal credit report may not be your only credit report. If you own a small business, there also may be a business credit report in your name. A business credit report is a tool used by lenders to make credit-granting decisions for a business. 

While business and personal credit reports are similar, there are key differences. For example, the numbers used for business credit scores (0–100) are unrelated to personal credit scores (350–850).

Business Credit Report Personal Credit Report
  • Identifying Information
  • Payment Information
  • Public Record Information
  • Inquiries
  • Company Background Information
  • Business Credit Score
  • Identifying Information
  • Account Information
  • Public Record Information
  • Inquiries
  • Dispute Instructions
  • Your business and personal credit reports are not linked but they can be related if you secure business debt with personal debt.
  • The Fair Credit Reporting Act (FCRA) allows lenders, under certain circumstances, to review personal credit histories for business lending purposes. This only applies to businesses that are structured as “sole proprietorships.”
  • As a business grows, separating business from personal credit can help business owners reduce personal credit risk associated with the business.
  • Many of the rules for building and maintaining good credit apply to both personal and business credit.
  • Many small businesses have little or no credit history on which to base a decision. Personal credit is used a “reference” for entrepreneurs.

Establishing Business Credit

To establish a business credit score, you first should ensure that your business vendors are reporting your payment history to one of the three major credit reporting agencies. These agencies cannot establish business credit for you.

Business credit relationships can be established through various vendors:

  • Suppliers
  • Wholesalers
  • Manufacturers Bank
  • Leasing Companies
  • Other Financial institutions

If you’re a sole proprietor or a business owner with fewer than 20 employees, your personal and business credit scores are closely linked in the eyes of banks and other lenders. So it’s important to take steps to protect both. You should monitor, evaluate and protect your credit standing just as you would protect any other business or personal assets. 

Now that you have learned more about establishing business credit, verify your business credit rating.

How Business and Personal Credit Determine Risk

Half of all small business use some form of personal credit to finance their business. Lenders use business and consumer credit to determine predict the risk by try to determine the following questions.

  • Does the business owner allow their personal credit to suffer to protect their business?
  • Does the owner all business accounts to go delinquent in order to protect their personal credit?

Find out why it may be important to establish a separate credit report for your business.

Find out more about business credit reports and how it can affect your ability to obtain credit.

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