Business credit vs personal credit
Short answer: In this guide, personal credit is about you as a person. Business credit is about the business. They are kept in different records.
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Two sets of records
Think of two folders. One folder holds the records about you: your own cards and loans. The other holds records about your business: the bills it pays and the accounts it has.
The SBA lists both kinds of report in one sentence. It says, "Regularly check both your personal and business credit reports for any loans or accounts you didn’t open yourself." That sentence shows the two are separate things to check.
When the two are not separate
Some businesses are not separate from their owner in law. The SBA says this about a sole proprietorship: "This means your business assets and liabilities are not separate from your personal assets and liabilities."
That sentence is about a sole proprietorship. Other business types are set up differently. We do not explain legal types here. If you are not sure which one you have, ask your state or a qualified professional.
What the law covers
The FTC says, "Individual consumer credit reporting is covered by laws such as the Fair Credit Reporting Act (FCRA)." That sentence is about individual consumer reports. We make no claim here about how the law treats business reports. The FTC study is the place to read more.
A simple way to tell them apart
Ask one question: whose name is on the account?
- If your own name is on it, it is a personal account.
- If the business name is on it, it is a business account.
Keeping the two apart also makes your own paperwork easier to read. Read business credit basics for the other pieces.
How Red Spectrum fits in
Red Spectrum is a membership for small business owners in the United States. A member gets a net-30 vendor account for the business and spends it on real business services from our catalog. Every membership payment and every catalog repayment is reported to Factiiv. We report to Factiiv and nowhere else. See what is Factiiv.
No guarantee of funding, loan approval or credit scores. Payment activity is reported to Factiiv.
Questions people ask
Is business credit the same as personal credit?
In this guide they are two sets of records: one about you, one about the business. The SBA names both: "Regularly check both your personal and business credit reports for any loans or accounts you didn’t open yourself."
Can my business and I be the same thing?
For a sole proprietorship, the SBA says, "This means your business assets and liabilities are not separate from your personal assets and liabilities." Other business types differ.
Does a business account change my personal record?
We found no source that answers this, so we make no claim. Ask the company that holds the account.
Sources
- SBA, Open a business bank account · https://www.sba.gov/business-guide/launch-your-business/open-business-bank-account · checked
“This means your business assets and liabilities are not separate from your personal assets and liabilities.”
- SBA, Manage your finances · https://www.sba.gov/business-guide/manage-your-business/manage-your-finances · checked
“Regularly check both your personal and business credit reports for any loans or accounts you didn’t open yourself.”
- FTC, Remarks regarding the small business credit reporting study · https://www.ftc.gov/system/files/ftc_gov/pdf/remarks-of-chair-lina-m-khan-regarding-6b-study-of-small-business-credit-reporting.pdf · checked
“Individual consumer credit reporting is covered by laws such as the Fair Credit Reporting Act (FCRA).”
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