How Does A Business Credit Score Differ From A Consumer Credit Score
It is difficult to run a business these days. There are so many different things you have to consider, everything from location to marketing, sales and purchases, it can be insane. One of the things that needs to be considered, but people often do not consider it, is their business credit score. The business credit score is an important part of dealing with a business, and is used for a vast number of different things.
For starters, a business credit score is used in a similar way to a consumer credit score, only for business. Credit scores are used to determine how likely it is that someone will default on a loan. So consumer credit scores are used to determine if the consumer will default, where as the business credit score is used to determine if the business itself will default. This is why it s possible to have a completely separate credit score for your business than your own personal credit score.
Business credit scores are also used by other businesses to determine if the business is worthwhile to do business with. If a business has a low credit score, that may mean that they are not actually very good at keeping to their agreements. If that is the case, then you would certainly not want to do business with them. Again, a business credit score is used similarly to a consumer credit score, but the two are different things.
Where consumer credit scores and business credit scores differ the most is in how they are figured. When it comes to consumer credit scores, FICO is the dominant business that judges the score. There are a few other businesses that use the concept of credit scores for various purposes, but by and large, when you talk about a consumer credit score, you are talking about a FICO credit score.
But business credit scores do not have a dominant business. There is no major, single place that gets used most often for business credit scores. This means that a business might have several different credit scores depending on how you are checking. It is always important to check on a variety of different credit scores if you are planning on doing business with a company, because that will give you the most well-rounded idea of how the company works and whether or not they are likely to default on their agreements.
Lastly, while business credit scores and consumer credit scores are different things, consumer credit scores can be used in determining a business credit score. This is most likely to happen in the case of small businesses, where the business owner is essentially the sole operator. In that case, knowing that person’s consumer credit score will help to know what their business will likely be like.
At the end of the day, there is not a lot of difference between a consumer credit score and a business one. It’s just a matter of whether it is your personal score, or your businesses’ score.
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