3 Big Differences Between Personal Credit Scores and Business Credit Scores

Key Differences Between Personal and Business Credit Scores

There are several important distinctions between personal and business credit scores, and understanding them can help you manage both effectively.

1. Time Frame for Risk Assessment

One major difference is how long the credit score evaluates the risk of default:

• Business credit scores predict the likelihood of a business being 90 days late on a payment within the next 12 months.
• Consumer credit scores predict the likelihood of an individual being 90 days late on a payment within the next 24 months.

2. What the Score Represents

• A consumer credit score reflects an individual’s risk of defaulting on personal obligations.
• A business credit score assesses a company’s risk of defaulting on business obligations—it does not consider the business owner’s personal financial behavior.
• Business credit is built separately from personal credit, based on how the company manages its financial responsibilities.

3. Credit Score Ranges

• Consumer FICO scores range from 350 to 850, with 850 being the best possible score.
• Business credit scores typically range from 0 to 100, with 100 being the highest rating.

These are just a few of the major differences between business and personal credit scoring. Understanding them can help you build stronger credit profiles for both yourself and your business.