Page 9 - Everything You Need To Know About Personal and Business Credit by Adrean Yancy

Everything You Need To Know About Personal & Business Credit
Why should you Care about Establishing a Good

Business Credit Score?

Fun Fact: Four out of every ten business people who applied for a loan were denied
because of their business score credit.

Well, the reasons are not far-fetched, but here are the reasons you must take your
business credit score seriously:
Banks, lenders, and suppliers will o er you terms based on your credit score. A
good business credit score will get you good deals and o er terms.
Almost all banks won't give you a line of credit until your business credit score
and FICO is ascertained and convincing enough.
Small businesses without a business credit score will need to have a solid

personal credit score.
A strong business score gets you a better chance of negotiation for low interest
and a high chance of approval.
It gives your business the leverage for high limit approval.

Personal vs. Business Credit

By now, I am sure you understand that your personal credit score and your business
credit score are not the same. Again, your personal credit score shows your (personal)
creditworthiness, while your business credit score shows your business
creditworthiness.

Simply, personal credit shows your nancial history while the other indicates your
business nancial history. It is essential to note that you cannot use them
interchangeably. Sadly, many small businesses use their personal credit scores for
their businesses instead of their business credit scores. Not only is it risky, but also it
can put one's business in trouble. IRS warns against mixing one's personal and
business credit.

Difference between Personal and Business Credit

Score

The following will help us see the di erences between personal and business credit,
their similarities, and how to score for both.

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