How Does Personal Credit Rating Differ from Business Credit Rating?

 

Personal Credit:

1. Your personal credit score can affect your ability to get a loan and also affect the interest rates you are offered.

2. The rate of interest of personal credit depends upon the personal credit score of a person. The higher the score, the lower is the interest rate.

3. There are three Credit reporting agencies- TransUnion, Equifax and Experian.

4. You have three different credit scores and you can find out all these scores by logging onto www.myfico.com.

5. Updates of interest rates depending on your score are posted daily.

6. If you have a FICO score of 500-589 then you will be paying more interest than if you have a FICO score of 720-850.

7. There are many factors affecting the personal credit scores but it is difficult to point out exactly which ones cause your score to change.

8. The most important thing to remember about your personal credit scores is that there are consumer protection laws passed by the government that give you the right to challenge the credit information given in your personal credit reports.

Business Credit:

1. TransUnion, Equifax and Experian along with compiling and keeping a track of the personal credit information are also the key players when it comes to compiling and maintaining a record of the business credit ratings.

2. Apart from TransUnion, Experian and Equifax there are a few more business credit reporting agencies.

3. The focus is more on these big companies but even the scores of these smaller agencies that collect and compile your business credit data matters. So, do not just focus on the big agencies.

4. Even the credit reports of the smaller agencies dealing in business credit data matters.

5. It might be helpful checking out some of these smaller agencies, especially those agencies that are industry specific and deal with companies handling only your type of business.

6. For example- If your business is manufacturing cloth and there is an agency that solely compiles credit data of cloth manufacturing industries, then you might want to focus on that agency too.

7. Unlike the case of personal credit, where laws are present to challenge the credit information provided by the agencies, there is no such law that can give businesses a right to challenge the credit information provided by any of the agencies.
The amount of information that can be gathered about a business is astounding. It is very difficult to understand the basics of business credit without the help of proper experts. Thus, business credit rating is more complex as compared to personal credit rating. Along with considering the above factors, one also needs to focus on compliance.

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