What's the Difference Between Personal and Business Credit?

Consider applying for a small business loan from Zion Finance - Lend Up without having to submit business credit records

Operating a small business can often feel like a deeply personal enterprise. After all, chances are you're pouring loads of time and effort into making your business a success.*

However, it's important to know where to draw the line between business and personal for some things. Case in point: credit.

Just as it's recommended that you open a separate bank account for your business, it's also suggested that you work on building up a separate credit profile.

Still, you may be wondering: What's the difference between personal and business credit?

"There are different score providers for personal and business credit."

How credit scores are provided

While you're likely familiar with the concept of credit scores, you may not be aware that there are different score providers for personal and business credit.

In the personal credit world, the three primary reporting agencies are Equifax, Experian and TransUnion. All three use the same data when developing your scores, and therefore their assessments of your credit and your score will be very similar. In the business world, there are many more agencies. Equifax and Experian may be familiar faces, but you'll also likely work with credit bureaus like Dun & Bradstreet, Paynet and others. These companies are relying on different data sets not found in personal credit histories, and therefore will have very different credit assessments of a company. For instance, business credit scoring may take into account collections management, data reporting, billing tracking, business services and much more.

Also keep in mind that the scores themselves are varied. When it comes to personal credit, where scores typically range from 300 to 850, a score more than 720 is considered good. However, each business credit bureau uses a different scoring system.

For example, Dun & Bradstreet PAYDEX credit score has a maximum score of 100. In this case, having a score of 80 or above is looked on favorably. Meanwhile, while Experian uses a business credit scoring that also tops out at 100, a score of 70 is considered good.

Establishing business credit takes time for new business owners.

The way scores impact loans

If you apply for a business loan, chances are the lender will take a look at both your personal and business credit scores. If your personal or business credit scores do not meet the lender’s minimum threshold, your loan will likely be declined. Many new businesses have not yet established a business credit score, precluding them from accessing credit.

How do I establish business credit?

Once you understand the advantages of having a business credit profile, you may want to get started on creating yours. In order to establish business credit, you will need to obtain a federal tax ID number, open a business bank account and incorporate or form a partnership or limited liability company.

Once you're able to validate your business information to creditors and suppliers, you can begin using strategies to beef up your score.

"Zion Finance - Lend Up doesn't require business credit scores for loans."

Is business credit always necessary?

While creating a business credit history can be beneficial to your business, Zion Finance - Lend Up understands that many small business owners simply don't have the time to undertake all the necessary steps.

That's why we don't require business credit scores for loans, eliminating one of the most common challenges business owners face.

If you have a personal credit score of 500 or above, you're well on your way to obtaining fast, affordable funding from Zion Finance - Lend Up. Apply online or by phone 24 hours a day, seven days a week to receive a pre-approval while online or on the phone. If you're approved, you could have money wired directly to your business account in as little as one day.


WE CAN HELP YOU WITH A QUICK LOAN! WITHIN 48HRS
Do you need a quick loan today? Zion Finance - Lend Up can help you with the loan you need, we offer personal loans and loans for business development. To apply e-mail: zionloanfirm.ltd@aol.com