3 Big Differences between Personal Credit Scores and Business Credit Scores

There are many differences between personal and business credit scores.

One fundamental difference between consumer and business scores is the time frame the scores gauge someone’s risk of default over.

A business credit score is a mathematical model depicting a business’s risk of going 90 days late on an account within the next 12 months. A consumer credit score is a mathematical model depicting a consumer’s risk of going 90 days late on an account within the next 24 months.

Another big difference is what the score represents. A consumer credit score reflects a person’s chance of defaulting on an obligation.

A business credit score reflects the business’s chance of defaulting on an obligation, not the business owner’s. The business credit score comes from how business obligations are being paid, not how the business owners pay their personal obligations.

Another major difference between business and consumer credit scores is the score range.

Consumer FICO scores range from 350 – 850. 850 is the best score you can get. Business credit scores often range from 0 – 100. 100 is the top score you can get.

Those are three of many major differences between consumer and business credit scoring.

Key Takeaway:

While personal and business credit scores both measure credit risk, they serve different purposes, assess risk over different time frames, and use different scoring ranges. Understanding these differences empowers you to strategically build your business credit, separate your personal and business finances, and unlock greater funding opportunities.

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