Credit is a tool that lets you borrow money or access goods and services with the promise to pay later. It’s essential for personal and business finances, enabling large purchases like homes or cars and helping small businesses grow. Lenders use credit reports and scores to decide whether to approve loans and set interest rates.
What is a credit score?: A credit score is a three-digit number (300 to 850) that measures your credit-worthiness based on your financial history. It helps lenders predict how likely you are to repay a loan.Your personal credit score is tied to your Social Security number, while a business credit score is linked to an EIN and evaluates your business’s financial health.
Why credit scores matter for small business owners: Although personal credit and business credit are different, your personal credit score can still impact your small business. From securing lower interest rates to building trust with potential investors or partners, your personal credit score could help with:
