
When it comes to understanding the differences between personal and business credit scores, there are a few key distinctions that really stand out.
First, the timeframe each score considers when evaluating the risk of default is different.
A business credit score looks at the likelihood of a business being 90 days late on a payment within the upcoming year.
On the other hand, a personal credit score extends that evaluation period to the next 24 months for an individual.
Then, there’s what each score actually signifies. A personal credit score is all about assessing an individual’s chance of failing to meet their financial obligations. It’s personal, tied directly to how you handle your finances.
In contrast, a business credit score zeros in on the business’s financial behavior, not the personal payment habits of the business owner. It’s an important distinction because it means that a business’s creditworthiness is judged on its own merit, separate from the owner’s financial actions.
Another major key difference is the scoring range.
Personal credit scores have a broader range, typically from 350 to 850, with 850 being the pinnacle of creditworthiness.
Business credit scores, however, operate on a much narrower scale, from 0 to 100, where 100 represents the highest level of credit reliability.
These 3 key differences show how financial trustworthiness is measured in the personal and business scoring.
About the Author
Robert Jackson is currently the CEO of Alln4fam Consulting Inc.
At Alln4fam Consulting, he specializes in helping business owners establish excellent business credit scores and then leverage those scores to access cash and credit for their businesses.
For more information on business credit scoring, business credit, visit: https://alln4businesscredit.com/