Business Credit Reports vs. Consumer Credit Reports: What's the Difference?

Business Credit Reports vs. Consumer Credit Reports: An Overview

Business and consumer credit reports have similar purposes: to inform prospective lenders about your creditworthiness and allow them to assess what risk they are taking should they give you a loan or credit card or extend “buy now, pay later” terms to you or your business. They differ in the types of information they contain and how they are used.

Business credit reports contain specific information regarding the business, such as ownership information, subsidiaries, company finances, risk scores, and any liens or bankruptcies. A business's credit report begins once it is incorporated and receives a federal tax identification number. Unlike consumer credit reports, business credit reports are public information and for anyone to access.

Consumer credit reports reflect only the information regarding an individual, such as their credit accounts ( loans and credit cards), closed accounts, delinquent accounts, and any liens or bankruptcies.

Key Takeaways

  • A business credit report is solely for a business and lists all pertinent information, such as company finances, liens, subsidiaries, and vendor payment data.
  • Anyone can access a company's business credit report as it is public information.
  • Consumer credit reports focus only on an individual's personal credit and list information such as loans, credit cards, delinquent accounts, and any liens.
  • Consumer credit reports can only be accessed by the individual and only those with a "permissible purpose."
  • The three main credit bureaus for business credit reports are Equifax, Experian, and Dun & Bradstreet. For consumer credit reports, they are Experian, TransUnion, and Equifax.

Business Credit Reports

Businesses need to be more proactive than consumers to establish their own credit histories so they can obtain credit separately from the personal credit of the business owner. Once an incorporated or LLC business obtains a federal tax identification number, the business credit bureaus can begin tracking trade credit and other credit activities.

Trade credit transactions occur when a supplier lets a business buy now and pay later. Payments on trade credit are reported to the business credit bureaus.

A business credit report includes the following information:

  • Business background information, including ownership and subsidiaries
  • Company financial information
  • Banking, trade, and collection history
  • Liens, judgments, and bankruptcies
  • Risk scores

The three business credit bureaus—Equifax, Experian, and Dun & Bradstreet—generate business credit scores from the above-listed information, as does FICO. Unlike consumer credit scores, which use standard methods and algorithms for scoring, each of the business credit bureaus uses completely different methods for scoring business credit risk, with different score ranges.

For instance, Dun & Bradstreet's PAYDEX focuses on how promptly a business pays its bills; useful information for vendors and suppliers when they’re extending trade terms. Experian’s Intelliscore Plus reports on the chance of your business falling seriously behind on its bills in the next 12 months, something lenders want to know. 

Business credit reports must be purchased from the credit bureaus, and unlike consumer credit reports, they are public, available to anyone who pays the fee. There is no federally mandated free annual business credit report for businesses. You'll have to pay to get a copy of your report from each agency, although some free information is available from websites such as CreditSignal.com (for Dun & Bradstreet) and Nav.com.

Consumer Credit Reports

When you first apply for credit, the three major credit bureaus—Experian, TransUnion, and Equifax—begin to compile a credit profile based on your credit activities. Only people with a “permissible purpose,” as defined by the Fair Credit Reporting Act, may request your credit report. When they do, the bureaus generate a report that includes the following:

  • A list of your credit accounts, including loans and credit cards
  • The balance owed and the current monthly payment on each account
  • An indication that the accounts are current and properly paid, or delinquent with the number of days past due
  • A list of closed accounts
  • Public records of liens, judgments, and bankruptcies
  • Information on past and current employers
  • History of residential addresses

The credit bureaus analyze the information to generate a credit score, which lenders use as a measure of your creditworthiness. Although your credit score may differ slightly among the three credit bureaus, all three generally use standard methods and algorithms established by the Fair Isaac Corporation, which generates your FICO score.

Consumers are entitled by law to receive one free credit report each year from each of the credit bureaus. (You can access it at annualcreditreport.com, the official website.) The credit score is not included with the credit report and must be obtained separately.

Special Considerations

It’s important for business owners to establish separate credit profiles for their businesses. Without a business credit profile, lenders rely on the business owner's personal credit profile for determining credit risk, which can limit the business's capacity to borrow what it needs.

Until a business establishes a business credit profile, the owner will be personally liable for any loan obligations, even if the business is a separate legal entity. It's rare for a new business to be able to get a loan without a signed personal guarantee by the business owner.

Business owners need to take deliberate steps to establish and build their business credit profiles as early in their development as possible.

  • Create a separate legal entity for the business, such as an S Corp, partnership, or LLC.
  • Separate business and personal bank accounts and record keeping.
  • Apply for a D-U-N-S number from Dun & Bradstreet. (It will establish your file with that bureau.)
  • Establish trade credit accounts with vendors and suppliers.
  • Obtain a business credit card; it could start with a gas card. If a bank offers a business credit card, make sure it reports payments to the business credit bureaus.
  • Make all payments on time.
  • Order business credit reports regularly to see that they are updated correctly.

Business credit reports can also be very useful management tools. Each of the business credit bureaus offers premium reporting services that can provide in-depth analysis for managing credit risk and business forecasting. A good business credit score means your business will have access to the financing it needs to grow at lower interest rates, more favorable payment terms from vendors, and lower rates on some commercial insurance.

Article Sources

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  1. Experian. "Intelliscore PlusSM." Accessed Dec. 3, 2020.

  2. Dun & Bradstreet. "Changes to a Business’s PAYDEX® Score." Accessed Dec. 3, 2020.

  3. Federal Trade Commission. "Fair Credit Reporting Act," Pages 10-22. Accessed Dec. 3, 2020.

  4. Duns & Bradstreet. "Dun & Bradstreet D‑U‑N‑S® Number." Accessed Dec. 3, 2020.