What is business credit used for?

Your business’s credit can affect a variety of decisions, including the following:

• Your eligibility or rates on loans, including Small Business Administration, or SBA, loans

• The business’s insurance premiums

• The net terms and credit limit you receive from vendors and suppliers

• Your ability to raise money from investors

• Whether you qualify for contracts with other organizations

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Is business credit the same as personal credit?

While they seem to function in much the same way, business and personal credit are not the same. But they serve a similar purpose: to help lenders and vendors determine how likely you are to repay a loan or other financial obligation taken out on behalf of your business. Though some business credit scores consider your personal credit, personal and business credit profiles are separate.

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How does business credit work?

Business credit reports are typically created when vendors, suppliers or creditors report a business’s accounts and activity to a business credit bureau. This activity helps to generate the information that informs your business credit scores. Some scores also consider information from the owner’s personal credit file and business repositories, such as the Small Business Financial Exchange.