Both your personal and business credit status affect your business. That’s it! Enough light has been shed on that. So, if you haven’t made changes, then you’re the main reason your company isn’t getting enough financial backing when things are heading south.

But business and personal credit scores are handled separately. The three major credit bureaus manage personal credit status; Equifax, Experian and TransUnion. And these organizations do not release your credit info without your permission.

On the other hand, business credit is monitored by the three main credit bureaus: Dun & Bradstreet, Equifax, and Experian.

But several other, smaller business credit bureaus may also have some credit info about your firm. And you may not know which info they’ve reported to bureaus if you’re not following up with each of them. In essence, anyone can access your business credit whenever they want to. They ‘won’t even need your permission.

So that’s the underlying discrepancy between business and personal credit.

As it stands, your business credit files only carry the information reported by lenders who’ve credited you. And your score should be a reflection of your performance in repaying these debts.

So how can you be active in influencing your business’s credit score? Here’s what Steve Ely, former President of Experian thinks.

Currently, he’s the CEO of eCredable.

Impact of Your Business Credit Score

Speaking on a small business radio show, Steve begins by drawing the line between business and personal credit and stressing the importance of the former for merchants looking to build their companies for long.

He goes ahead to explain what happens when you mix personal and business credit:
1) You pile up personal legal liability when you secure business credit using personal info.
2) You eat into your personal credit and lower your limit which is usually capped.
3) You are not establishing business credit to open doors for more affordable funding rates.

A company should keep track of its business score that usually runs from 0 through 100. Anything 80 or above is excellent. According to Steve, most lenders will only report to one or two Bureaus or fail to report at all.

Here’s Steve’s list for every form of credit that should be part of your credit score:

  • Credit card
  • Trade credit
  • Credit line
  • Equipment financing

Make sure the credit provider reports your performance to at least one of the three business credit bureaus so that it factors into your business credit to boost up your score.

Wrapping up

Now you know how personal and business credit scores differ. Make good use of that info to build your business on a long-term basis.

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