Personal vs Business Credit: What’s the Difference?

As a business owner, you probably know the importance of maintaining good credit. With bad credit — or no credit for that matter — you’ll struggle to secure financing. Whether you’re applying for a loan, a credit card or a line of credit, you’ll have a better chance of getting approved if you have good credit. With that said, it’s important to familiarize yourself with the differences between personal credit and business credit.

What Is Personal Credit?

Personal credit refers to the credit-based financial metric of an individual. In the United States, it’s linked to a person’s Social Security Number. When you apply for a mortgage or any other loan, you’ll have to provide the lender with your SSN. The lender will then check your credit score, as well as your credit history, to determine whether to approve or deny your application.

You can obtain a report of your personal credit for free once a year by visiting Available by clicking the aforementioned link, it’s operated jointly by the three major credit bureaus, including Equifax, Experian and TransUnion. Even if you don’t plan on using your personal credit, you should still get into the habit of checking it on a regular basis. Using, you can obtain a copy of your personal credit from all three credit bureaus for free.

What Is Business Credit?

Business credit, on the other hand, is a credit-based financial metric of a business entity. Unlike with personal credit, business credit isn’t linked to a person’s SSN. Instead, it’s linked to a person’s Employee Identification Number (EIN).

With the exception of sole proprietorships, most U.S. businesses have an EIN. Also known as a Federal Employer Identification Number or Federal Tax Identification Number, it’s assigned to businesses for tax purposes. The Internal Revenue Service (IRS) gives each U.S. business a unique EIN. In addition to being used for tax filings, though, EINs are also used for business credit.

To check your business credit, you’ll need to purchase a copy from one or more credit bureaus.

The Bottom Line

Personal and business credit are pretty much the same, with the only difference being that personal credit is linked to a person’s SSN, whereas business credit is linked to a business entity’s EIN. Keep in mind that some lenders may look at both types of credit when you apply for a business loan. Therefore, you should actively monitor, as well as improve, your personal credit and business credit.

Have anything else that you’d like to add? Let us know in the comments section below!

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