Background

Business credit scoring grew in prominence after lenders and suppliers wanted a reliable way to evaluate companies without relying solely on an owner’s personal finances. Major commercial bureaus — Dun & Bradstreet (Paydex), Experian Business (Intelliscore), and Equifax Business — developed distinct scoring models to reflect business activity, trade payments, and public records (Dun & Bradstreet; Experian; Equifax).

How it works

  • Data sources: Business bureaus pull trade-payment histories, public filings (UCC liens, bankruptcies), business size, years in operation, and industry risk. Personal scores use credit card and loan accounts, payment history, credit mix, and utilization (Consumer Financial Protection Bureau).
  • Score scales: Business scores commonly use 0–100 (Dun & Bradstreet Paydex, Experian Intelliscore uses 1–100), or ranges like Equifax Business Risk Score (higher numeric scale). Personal FICO and VantageScore use 300–850.
  • Use cases: Lenders and trade vendors use business scores to set credit limits and payment terms; some lenders also review owner personal credit or require a personal guarantee — especially for new or small businesses (U.S. Small Business Administration).

Real-world examples

  • Startup with great founder credit but weak vendor history: A tech founder with a 780 personal FICO was denied net-30 vendor accounts because the new business had no trade lines. Building vendor relationships and getting small, reported trade accounts improved the business score in months.
  • Established restaurant: Frequent late supplier payments and a lien lowered the business score despite the owner’s solid personal credit. After fixing payment processes and settling the lien, the restaurant’s credit terms improved.

Who is affected

Every business that seeks credit, vendor terms, or commercial insurance is affected. Sole proprietors and single-owner LLCs are more likely to have their personal credit considered, while incorporated entities with established business profiles can often access trade credit that relies mainly on the business score.

Practical steps to separate and build business credit

  1. Form a legal business entity and get an EIN. 2. Open a dedicated business bank account and use it for business transactions only. 3. Register with business credit bureaus and obtain a D‑U‑N‑S number with Dun & Bradstreet (dnb.com). 4. Establish trade lines with vendors that report payments to business bureaus. 5. Pay vendors and creditors on time — payment history is the strongest driver of many business scores (CFPB). 6. Monitor reports and correct errors regularly.

In my practice, I’ve found that adding two reliable, reporting trade vendors within the first year moves the needle faster than a single high-limit account. Regular, documented on-time payments build credibility with suppliers and underwriters.

Common mistakes and misconceptions

  • Assuming personal credit always substitutes for business credit. While personal credit matters for guarantees and some underwriting, it doesn’t replace a business credit report. – Mixing personal and business finances — common among sole proprietors — can produce weaker business credit and complicate underwriting. – Not monitoring business reports: errors such as mixed company identities or incorrect public records are common and fixable (see Fixing Identity Mix‑Ups on Business Credit Reports).

Further reading (internal resources)

Quick FAQs

Q: Can my personal credit affect my business credit?
A: Yes — especially for startups, sole proprietors, or when a lender requires a personal guarantee. Lenders will often review owner credit alongside the business report (SBA, CFPB).

Q: How often should I check business credit?
A: Check quarterly at minimum and after major events (new loans, legal filings, or vendor disputes). Frequent monitoring helps detect errors and respond quickly.

Sources and authoritative references

  • Consumer Financial Protection Bureau (cfpb.gov) — guidance on business and consumer credit practices.
  • U.S. Small Business Administration (sba.gov) — underwriting and small-business lending guidance.
  • Dun & Bradstreet (dnb.com) — Paydex and business credit products.

Professional disclaimer

This article is educational and not personalized financial or legal advice. For guidance tailored to your business structure and goals, consult a licensed financial advisor or attorney.