The short answer
Personal credit is tied to you and your Social Security number. It is kept by the consumer reporting companies, mainly Equifax, Experian, and TransUnion.
Business credit is tied to the company: its legal name, its EIN, and, at Dun & Bradstreet, its D-U-N-S number. It is kept by business bureaus such as Dun & Bradstreet, Experian Business, and Equifax's commercial division.
Side by side
| Personal credit | Business credit | |
|---|---|---|
| Tied to | You (Social Security number) | The company (legal name, EIN, D-U-N-S number) |
| Who keeps the file | Equifax, Experian, TransUnion | Dun & Bradstreet, Experian Business, Equifax business files |
| Common scores | FICO Score and VantageScore, usually 300 to 850 | D&B PAYDEX (1 to 100), FICO SBSS (0 to 300), and others |
| What drives it | Many factors, including payment history and amounts owed | Largely payments reported by vendors and lenders |
| Who can see it | Limited by federal law to people with a permissible purpose | Business reports can generally be purchased by others |
The access difference surprises many owners. The Consumer Financial Protection Bureau explains the rules that protect consumer reports, while Dun & Bradstreet notes that anyone can buy another company's D&B report through a subscription. That is one more reason to keep business records accurate.
Why keep them separate
- Your personal credit isn't carrying every business purchase, so business spending doesn't crowd your personal file.
- The company builds its own payment history, which suppliers, landlords, and lenders can review.
- Vendor terms such as Net 30 let the business buy now and pay on terms, on its own profile.
- Separate accounts make the company's records cleaner and easier to verify.
Where they still overlap
Separation is a goal, not a switch. Forming an LLC doesn't by itself create a separate credit history. A few common overlaps:
- Personal guarantees. If you sign one, the vendor or card issuer may check your personal credit and, depending on its policy, report to it.
- New businesses. The SBA notes that loan eligibility for a new business is typically based on the owner's personal credit score, so your personal credit still matters early on.
- Sole proprietors. Without a separate entity, business and personal finances are much harder to separate.
- Applications. Many lenders and card issuers review both the company's file and the owner's.
How to start separating them
These are the first stages of our 8-stage roadmap:
- Have the entity in good standing with its state and an EIN. We don't form companies; a licensed professional can help with that.
- Open a business bank account in the company's exact legal name.
- Use the same legal name, physical address, and business phone everywhere.
- Request a free D-U-N-S number from Dun & Bradstreet.
- Open Net 30 vendor accounts that report under the company's EIN, and pay them on time. See how the PAYDEX score works.
Common questions
Does an LLC have its own credit score?
It can. Once payments are reported to its business files, an LLC can have scores such as a D&B PAYDEX, tied to the company rather than to your Social Security number.
Will business accounts show on my personal credit report?
Accounts in the company's name report to business bureaus. If you personally guarantee an account, the lender or card issuer may check or report to your personal credit, depending on its policy. Ask before you sign.
Do I still need good personal credit?
Often, yes, especially early. The SBA notes that loan eligibility for a new business is typically based on the owner's personal credit, and some vendors ask for a personal guarantee.
Sources
- Consumer Financial Protection Bureau: Consumer reporting companies
- Dun & Bradstreet: Business Credit Scores & Ratings
- FICO: Small Business Credit Scores (FICO SBSS)
- U.S. Small Business Administration: Fund your business
Want to know where your business stands?
A specialist can review your business credit stage on a free consultation, in English or Spanish.