Business vs. Personal

Building Business Credit and your personal credit share some similarities, however there are some chief differences that you need to be aware of when starting to build business credit. Business credit is rated on creditworthiness, just like you are as an individual and your credit score is based on similar factors, such as payment history, amount of total credit, revenue, etc. So in the big picture, you can transfer a lot of what you already know about personal credit to building credit for your business. Let’s explore some of the differences between your personal credit and that of business credit.

Credit Laws

Here’s something that stands out immediately. 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. Business is business, so does a company make money or increase their value by digging backwards in paperwork to find a mistake that is going to satisfy your request? No. It doesn’t pay to provide business credit customer service as a reporting entity or provider of business credit. You should know that if you have issues with your business’ credit report, you will have a much tougher time getting those dealt with than your personal credit report.

Business Credit Scoring

There are 4 primary business credit reporting agencies and bureaus and several others that just got into the business aspect of credit reporting and a couple new ones. You can view all of the business credit reporting agencies and bureaus and view a summary of how they rate business credit worthiness.

There is another aspect of business credit scoring that is not found on personal credit reports; those are:

  • Business Verification
  • Business Public Records
  • Collections Management
  • Data Management
  • Data Reporting
  • Business Credit Information Reporting
  • Billing Tracking
  • Business Services

There are a number of differences with business credit reporting, information management and scoring as opposed to that of a personal credit report. Business Credit reporting agencies and bureaus have more data to evaluate and a lot more requirements.

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