Do you know the differences between personal and business credit scores?
Personal and business credit scores differ in many ways.
One fundamental difference between consumer and business scores is the time frame the scores gauge someone’s risk of default over.
A business credit score is a mathematical model that shows the risk of an account going 90 days past due within the next 12 months.
The consumer credit score indicates the likelihood of a consumer going 90 days late on an account within the next 24 months.
Another important difference is what the score represents.
A consumer credit score indicates how likely it is for a person to default on an obligation.
A business’s credit score reflects its likelihood of defaulting on an obligation, not the owner’s.
Businesses are scored based on how they pay their obligations, not how they pay their personal obligations.
The range of credit scores between a business and a consumer is also a significant difference.
Scores for consumers range from 350 to 850, with 850 being the best possible score. Scores for businesses range from 0 to 100, with 100 being the best possible score.
Consumer credit scoring differs greatly from business credit scoring in a number of ways.
For more information on business credit scoring and business credit, you can contact us here.