How Does Business Credit Differ from Personal Credit?
While personal credit scores are tied to an individual's Social Security number, business credit scores are linked to the business's Employer Identification Number (EIN). Here's how they differ:
1. Criteria for Scoring: Business credit scores are often based on factors like payment history with suppliers, credit utilization of business accounts, and the business’s financial stability.
2. Scoring Range: Business credit scores typically range from 0 to 100, compared to 300 to 850 for personal credit scores.
3. Impact: Business credit can affect your ability to secure [business financing](), negotiate favorable terms with suppliers, and more. However, small businesses often rely on the owner's personal credit, especially in the early stages.