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Personal vs Business Credit: How Are They Different?

August 9, 2023 by Kayla Monae

Understanding the Difference Between Personal and Business Credit

When it comes to credit, there are two main types: personal and business (or corporate). Personal credit shows the financial stability of individuals – from credit cards, auto loans, and mortgages. Business credit incorporates the borrowing history and financial health of a business. While they may seem like two separate things, the truth is that personal credit and corporate credit are often intertwined. Having a strong personal credit score can help you secure better corporate credit terms for your business. Understanding the differences between the two types of credit can help you make smart financial decisions for both yourself and your company. 

Personal Credit 

Personal credit refers to an individual’s credit history and creditworthiness and is used by lenders and financial institutions to determine the likelihood that the individual will pay back a personal loan or credit card balance on time.  

A personal credit score is a numerical representation of an individual’s creditworthiness, which is calculated based on a variety of factors including payment history, credit utilization, and length of credit history. Personal credit scores typically range from 300-850, with higher scores indicating a greater likelihood of being approved for (and repaying) loans or credit cards, with lower interest rates and more favorable terms. It’s important to maintain a strong personal credit score for financing major purchases such as a house or car, having financial freedom and flexibility, and having better rates on your loans. 

When it comes to your personal credit, the three main credit bureaus – Equifax, Experian, and TransUnion – are the most important players. These bureaus are responsible for collecting information about your credit history, which is then used to create your credit report and credit score. Equifax, Experian, and TransUnion all collect data from creditors and public records, but they do have some differences.  

It’s important to monitor your credit report from all three bureaus regularly to ensure that there are no errors or fraudulent activity. You can check your credit report for free once a year from each bureau at AnnualCreditReport.com. You can also access your credit report and score directly from each bureau. Knowing your credit history and score can help you make informed decisions about your finances and help you achieve your financial goals. 

Business Credit 

Business credit, on the other hand, is based on your company’s creditworthiness, which is determined by factors such as your payment history, credit utilization, and business history. Your business credit score can also have a significant impact on your ability to obtain financing, including equipment financing. Lenders will typically look at your business credit score to determine your company’s financial stability and likelihood of paying back a commercial loan or business credit card balance on time. Business credit also factors in other variables including the industry in which the company operates, time in business, annual revenue and analysis of the company’s financial statements.   

Some of the main credit bureaus for businesses are Dun & Bradstreet, Experian Business, Paynet, and Equifax Business. These bureaus are responsible for collecting information about a business’s credit history, which is then used to create a business credit report and score.  

  • Dun & Bradstreet is the oldest and largest business credit bureau. They collect data from a variety of sources, including public records, trade references, and financial statements.  
  • Experian Business and Equifax Business both collect data from credit card companies, banks, and other financial institutions, as well as public records. 
  • PayNet also collects data from a variety of sources 

Business credit analysts will ultimately look at several factors, including the company’s time in business, the industry in which they operate, annual revenue, and business credit scores to determine the creditworthiness of an applicant.  

How Does Personal and Business Credit Intertwine? 

Often, lenders look at both your personal and business credit when evaluating the creditworthiness of a business. If you have a strong personal credit score, you may be able to use that to secure financing for your business. For example, if a small business owner applies for a loan, the lender may look at both the owner’s personal credit score and the business’s credit score to determine the likelihood of repayment. 

A strong credit history shows that you are likely to repay your debts on time, while a poor credit history suggests that you may be a higher risk borrower. By evaluating your credit history, lenders can make informed decisions about whether or not to approve you for credit, and what terms and interest rates to offer you. If a business owner has a poor personal credit score, they may have difficulty obtaining financing or credit for their business. Therefore, it is important for both individuals and business owners to maintain good credit scores to help ensure financial stability and success. 

Credit Score and Equipment Financing 

When it comes to equipment financing, having a strong personal credit score can be beneficial. Many equipment financing companies will consider an individual’s personal credit score when evaluating their application for financing. A strong personal credit score can help individuals qualify for financing and secure more favorable terms. Additionally, a strong personal credit score can help individuals obtain financing for more expensive equipment, since lenders may be more willing to take on the risk of financing larger purchases. 

At AP Equipment Financing, we understand the importance of both personal and business credit when it comes to equipment financing. That’s why we work with our clients to understand their unique financial situation and help them find the financing solution that works best for them. If you have any questions or need help securing financing for your equipment needs, contact us today at (800) 604-4817 or info@apfinancing.com to learn more about our financing options and how we can help you grow your business.   

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IT'S SO SIMPLE.

Apply

Every equipment financing transaction begins with a credit application. Complete a secure online credit application for expedited decisioning.

Review

Once our credit team reviews the application, a professional account manager will return a proposed structure of your financing agreement for you to review.

Organize

Time to organize and send in documents such as your equipment invoices and we are one step away from...

Sign

Signing your official equipment financing documents. I's have been dotted and T's have been crossed and your equipment is on its way to your business!

SEE THE PROCESS   GET STARTED

I am so grateful for the opportunity for someone to trust in me to expand my business. They kept in complete contact with us from the start to the end, even when they were on a business vacation. At a point when we had to change vendors and purchase a different truck due to circumstances with the previous vendor, no one ever made us feel like it was a bother to reconfigure the paperwork and financing terms. It was a great experience and I would recommend others to do business with this company.

- William - Arborist, SC

My overall experience was great. I believe the funding is going to help us have the equipment we need to operate at a level that will help us grow. The team was great to work with.

- Ryan - Cinematographer, NE

​The first time I used AP was through a bucket truck dealer in Clinton Illinois about five years ago. I made the long trip over there and arrived late in the day. The team worked till eight o'clock at night to get things finalized and to get me on the road with my new bucket truck. They earned my business right there and have used your services numbers times since​.
- Matt - Arborist, IN

The reason why I come back and do business again is because of the fantastic AP team. In my business time is money and it’s nice to have someone do what they say there going to do and work quickly. Thanks!
- Keith - Trucking Company, CA

I give props to Todd Mickey and team!! Great guys to do work with. I'm located in upstate NY. I can get financed faster from AP EQUIPMENT FINANCING using Todd and team in California faster and more efficient than right here in my home town. This is out second loan being held with AP Financing and next year will be our third. Thanks Todd!!
- Walter - Arborist, NY

There were absolutely no issues at all! From Austin to Aubri and then Amanda, these folks are the ones that make the company what it is! They're all super professional, courteous, well-mannered and most of all... friendly as it gets! When I work with these professionals, I know my company can count on them to get all my equipment financed on time and on budget! THANK YOU for being a major part of my company's back bone!
- Tim - Parcel Delivery Contractor, CA

Great customer service and great people!! They really focus on helping you find the best equipment for your business. I've been working with this company for the past 6 years have purchased 8 trucks. Mike Helder and his co-workers have been excellent with prompt service for getting my vehicles financed with good follow up after purchase. Thank you guys.
- Tae - Parcel Delivery Contractor, WA

Working with Fred Williams to secure my company's new truck was a "no-hassle" experience. He was able to answer all my questions and provided timely customer service. I would not hesitate to recommend him, and AP Equipment Financing, to others in my service industry.
- Peter - Parcel Delivery Contractor, ME

Friendly staff always trying to make things go as smoothly as possible. Benefiting our company by supplying financing for equipment necessary to keep us on the road.
- Phil - Parcel Delivery Contractor, WA

The Chevys are working out well! Very good trucks, and they have helped out a lot. It was a pleasure doing business with you guys. Everything went very smooth and everyone I dealt with were very professional, kind, and knowledgeable. Definitely will use you again for any future purchases. Thank you so much for helping me grow my business.
- Christopher - Parcel Delivery Contractor, WY

Hey Jordan! I just want to tell you thank you for all of your help with getting me a new van! Pick-up last Friday went very smooth. The van will be a great addition to my fleet. If I ever need another vehicle you'll definitely be the guy I call! Thanks again for everything!
- Randy - Parcel Delivery Contractor, MN

You've been great to work with and I would without a doubt recommend you guys. You have been the easiest lender to work with and I am very grateful.
- Kelly - Parcel Delivery Contractor, TN

What was most noteworthy to me was that your company took the time to offer information that directly affects our lives as contractors. Moreover, the knowledge we’ve gained from your efforts has placed us in a position to more readily and effectively negotiate for the long-term viability of our company.
- Parcel Delivery Contractor, LA

We were having a hard time finding funding to purchase a truck through our bank. We learned about Allegiant and got approved in a couple days. It was smooth sailing from there! The honest, diligent, hardworking staff made the process a breeze!
- Arborist, CO

In business, you have to acknowledge what your time is worth. I’ve had offers from other financers who will beat Allegiant rates but I know I can count on Allegiant to provide great, timely service every time and for that I will continue to work with them and recommend them to other businesses for the same reason.
- Greg – Arborist, WA

I have been a FedEx Ground contractor for 14 years, operating out of Massachusetts. I just picked up my second Hino and could not be happier with them. I only wish I knew 14 years ago what I know now. Can I give a shout out for the team and all the people involved that made this purchase even more special? Austin, and the ladies at AP Equipment Financing. Thanks Again!
- John – Parcel Delivery Contractor, MA

I started using Allegiant for the relationship I have/had with Dave. This business is about building relationships and, when you find someone you work well with, you make sure to keep that relationship healthy. It’s just good business.
- Greg - Arborist, WA

I came to Allegiant with a time sensitive equipment purchase. A vendor was offering me a $5,000 discount on a soft content wash system if I purchased by the end of the month. There was only one business day left in the month, but due to the hard work from Dave, Janice, Sylvia, and Briana, Allegiant was able to get my equipment funded the next day!
- Greg – Cleaning and Restoration Contractor

Thank you so much for all your help on sourcing and financing my newest truck. It showed up today and it’s absolutely gorgeous and my drivers can’t wait to use it. I know I’m not the easiest person to get in touch with, especially when I’m driving, but thank you very much.
- Brian – Parcel Delivery Contractor

Using AP Equipment Financing has been such an easy and pleasurable experience, a year later I know there was no one else to call. The team helped me acquire the equipment needed at the price that was right. The equipment arrived ahead of schedule and as requested!
- Peter, Parcel Delivery Contractor - NY

It's great to have a lending partner who understands the rental business. A large bank won't understand the up and downs of cash flow for a rental yard like mine.
- Ian - Owner of Rental Company, CT

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