Education Past Articles Business What is The Difference Between Personal and Business Credit
| What is The Difference Between Personal and Business Credit |
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Building your business credit share some similarities to how you built your personal credit , however there are some key differences that you need to be aware of when starting to build business credit. Personal credit is rated by a credit score and is based on payment history, amount of total credit, length of credit, etc. Business credit is rated on creditworthiness very similar to persoanl jsut under the name of the company. So looking at it from the big picture, you can transfer a lot of what you already know about personal credit to building credit for your business. So let's review some of the key differences between your personal credit and and business credit. Credit Laws For personal credit there are consumer credit laws that allow you to challenge anything on your personal credit report. You can have negative credit entries removed and are entitled to Fair Credit Reporting Acts. There are no such laws when it comes to Business Credit. If you have discrepancies on a business credit report, you can alternately challenge them with the reporting entity, however they do not have to respond, by law, nor are there any time constraints with their response. So if you have issues with your business' credit report, you might have a much tougher time getting those dealt with than personal credit report. Business Credit Scoring There are four main business credit reporting agencies / bureaus and a few others that focus soley on credit reporting. Some of the additional items found in a business profile that are not found on a personal report are:
When it comes to personal credit, Experian, Transunion, and Equifax are the three primary reporting agencies that keep track of and evaluate the personal credit histories for every individual. These agencies use personal Social Security Numbers to keep track of all the credit transactions and payment histories that are reported. These personal credit reporting agencies also generate a standardized score called a FICO score that can be used to evaluate the overall strength or weakness of someone’s personal credit profile. In order to come up with a FICO score, the agencies evaluate how much a person borrows and how well he or she repays their loans. Where a personal credit history is based on financial information provided by credit card companies, retail establishments, and financial institutions, a business credit rating is determined by information supplied by the business owner and gathered from a business’s vendors, suppliers, and other trade accounts. Much the same way the personal credit reporting agencies use Social Security Numbers for the individual credit histories that they track, these business reporting agencies use the Employer Identification Numbers (EIN) of those businesses in order to accurately report their business credit histories. When it comes to reporting and evaluating business credit histories, Experian, Transunion, and Equifax also have small business divisions that are devoted to tracking the business credit histories for every business and corporation. Experian As you can see there are a number of differences with business credit reporting, information management and scoring as opposed to that of a personal credit reporting. Detailed below is a list of these services: ExperianOne of the three primary consumer credit reporting agencies who has also begun to provide credit evaluations for businesses and corporations. BusinessExperian offers a wide range of services, including Business Verification, Business Credit Scores, Business Credit Reports, Business Credit Monitoring, and Business Public Records. Experian’s Small Business Services also offers Consumer Mailing Lists and Business Leads. EXPERIANP.O Box 9532, TransunionIn addition to Business Credit Reporting, Transunion also provides assistance to small business owners through Marketing Services, Fraud and Identity Management, Risk Management, and Collections Management. TRANSUNION Equifax Small Business EnterpriseThe business division of one of the primary consumer credit rating bureaus. Equifax Small Business Enterprise provides business credit histories and evaluations for over 22,000,000 small businesses and corporations. In addition to Business Credit, Equifax offers assistance to small business owners related to Data Management, Data Reporting, Fraud, Marketing, and Risk. EQUIFAX SMALL BUSINESS ENTERPRISE Dun & Bradstreet® (D&B®)Without a doubt, the most well-known and established business credit reporting agency. D&B® has compiled business credit profiles on hundreds of millions of global companies and corporations. In addition to Business Credit information, D&B® can also assist small businesses collect debt from customers, find new customers, and research new opportunitites. DUN & BRADSTREET® Credit.netCredit.net is a division of InfoUSA that generates credit reports on over 14,000,000 businesses and corporations. 6,000,000 of the reports in their database have been completed on small businesses with four employees or less. With a Credit.net business credit report, you can make better decisions on extending small lines of credit, locate data on small, privately-owned businesses, verify the existence of a business, and identify headquarters and lines of business credit. CREDIT.NET Accruint® BusinessThis is a new business that is a combination of forces between LexisNexis, one of the leading providers of business services and information and the Better Business Bureau (BBB). With a business credit report from AccurintRBusiness, you can get all the information you need on over 150,000,000 small U.S. businesses in order to make better decisions on vendors, partners, customers and competitors. In addition to Company Profiles (including addresses, phone numbers, DBAs, etc.) you will also receive credit and payment data, public record data (such as bankruptcies, judgments, tax liens, and UCC, associated businesses and principals, and a Better Business Bureau membership report. ACCURINT® BUSINESS ClientCheckerThis is a credit reporting bureau that started in 2003 and specifically targets small businesses, freelance professionals, and contractors seeking information to help them determine which other businesses they should do business with. ClientChecker Business Credit Reports provide a comprehensive summary of users' trade payment experiences with their clients. Business Credit Reports are created when the users of ClientChecker and BillingTracker invoicing software report that their clients have paid on time, late, or not at all. The data from each user is combined to produce a business credit report of average days paid late, number of incidences of non-payment, and a PayQuo™ score. CLIENT CHECKER |
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