Understanding the difference between these two credit profiles could determine whether your funding application gets approved.
Get My Fundability ChecklistYour personal credit reflects how you manage your own finances. It's tied to your Social Security Number and includes your credit score, payment history, debts, and credit utilization.
Even if you're applying as a business, your personal credit can affect approval—especially for startups or sole proprietors.
Business credit is your company's financial reputation. It's tied to your Employer Identification Number (EIN) and D-U-N-S Number (if registered), and it reflects your business's creditworthiness—not yours.
A strong business credit profile can qualify you for higher limits, lower interest rates, and better vendor terms—independent of your personal score.
Lenders evaluate both personal and business credit profiles to get a complete picture of financial responsibility and risk.
| Credit Type | How Lenders Use It | When It Matters Most |
|---|---|---|
| Personal Credit | Assesses the owner's financial habits and ability to manage debt | New businesses, sole proprietors, small loans |
| Business Credit | Evaluates the company's financial health and payment history | Established businesses, larger loans |
| Combined | Provides a complete risk assessment | Mid-sized businesses, medium loans |
The weight given to each credit profile depends on factors like business age, revenue, and loan amount.
When applying for business funding, lenders evaluate both credit profiles because:
Download our free 27-Point Fundability Checklist to audit your business's readiness for funding approval.
"Before applying for any loan, it's critical to know whether your business is truly fundable. This checklist will show you exactly what lenders look for."
Most loan rejections come down to one thing: lack of fundability.
You can begin building business credit immediately by opening accounts that report to business credit bureaus. However, it typically takes 6-12 months of consistent payment history to establish strong business credit scores.
Yes, but options may be limited. Strong business credit can sometimes compensate for weaker personal credit, especially for established businesses. Startups will generally need to improve personal credit first or seek alternative funding sources.
No. Some lenders focus primarily on business credit (especially for larger loans), while others rely heavily on personal credit (common with small business loans and credit cards). The more established your business, the less your personal credit will be considered.
Now that you understand the difference between business and personal credit, learn how to establish strong business credit profiles to improve your fundability.