When you apply for business financing, a lender may read two credit files: the business’s and your own. While a business is young, the owner’s personal credit usually carries more weight. As the business builds its own payment history with suppliers and lenders, its file carries more of the decision.

Checking both before you apply shows you what a lender is likely to see, and leaves time to fix anything that’s wrong.

Two files, kept by different bureaus

Your personal credit is tied to your Social Security number and kept by the three consumer bureaus: Equifax, Experian and TransUnion. The score most lenders use is a FICO score, and most versions run from 300 to 850.

Your business credit is tied to the business and kept by business bureaus, chiefly Dun & Bradstreet and the business divisions of Experian and Equifax. Each uses its own scores and scales.

The two are protected differently. Federal law limits who can pull your personal report and why. Business reports are sold more openly, and suppliers, landlords, insurers and lenders can usually buy one without asking you. That alone makes it worth knowing what yours says.

How to check your personal credit

  • Get your free reports from all three bureaus at AnnualCreditReport.com, the site set up under federal law for that purpose.
  • Get your score from your bank or card issuer, many of which show one for free, or buy your FICO score directly.
  • Check as often as you like. Looking at your own credit is a soft inquiry and doesn’t affect your score.

Read each report line by line. Look for accounts you don’t recognize, late payments you made on time, wrong balances, debts listed twice, and names or addresses that aren’t yours.

How to check your business credit

  • Dun & Bradstreet. Your file is tied to a D-U-N-S Number, which is free to get. Its best-known score, PAYDEX, runs from 1 to 100 and reflects how promptly you pay suppliers. A score of 80 means paying on time, and higher means paying early.
  • Experian and Equifax. Both sell business reports with payment history, public records such as liens and judgments, and scores on their own scales.

Some banks also use scores that blend business and personal data into one number.

In your business reports, check the basics first: legal name, address, phone, industry and the year you started. Then look at the payment history suppliers have reported, and at any liens or judgments. A lien from a loan you paid off should be gone. If it isn’t, ask that lender to file the termination.

What a lender reads in your file

A score is a summary, and a lender usually reads what’s behind it:

  • Late payments, and how recent they are
  • How much of your available credit you’re using
  • How long your accounts have been open
  • Recent applications for new credit
  • Public records such as tax liens, judgments and bankruptcies
  • On the business side, how you pay suppliers, and liens filed by other lenders

Credit is one factor among several. Many lenders consider personal scores from the 500s for working capital, while banks often look for the high 600s or above. Deposits and time in business can count as much as the score. If your score is still catching up, see funding that weighs your revenue, and read what lenders weigh for the rest of the picture.

Hard and soft inquiries

A soft inquiry happens when you check your own credit or a company prescreens you, and it doesn’t affect your score. A hard inquiry happens when a lender pulls your credit to make a decision. One hard inquiry can lower a score by a few points for a while, and several in a short stretch can add up.

Applying with Noya Funding won’t affect your credit score. Before any lender checks your credit, ask whether the pull is hard or soft, and when it happens.

What helps, starting this month

For your personal credit:

  • Pay every bill on time. Autopay for the minimum covers the busy months.
  • Keep card balances low against your limits. Many advisers suggest staying under 30%.
  • Dispute errors in writing with the bureau that reports them, and include copies of your proof. The bureau generally has 30 days to investigate.
  • Hold off on opening new accounts in the months before you apply.

For your business credit:

  • Get a D-U-N-S Number and check what your file says.
  • Keep business and personal money apart, with a business bank account and a business card in the company’s name.
  • Open accounts with suppliers that report payments to the business bureaus, and pay them on time or early.
  • Keep your name, address and phone identical across your bank, your filings and your bureau listings.
  • Ask for a lien to be cleared as soon as the debt behind it is paid.

When an accurate item weighs on your score

Some items that lower a score are correct: a late payment from a year when a large customer paid you slowly, or a card carried close to its limit. Those can’t be disputed away, but their weight fades. Late payments can stay on a personal report for up to seven years, and they count for less as they age and as on-time payments build up behind them.

A high card balance is quicker to fix. Paying it down can help within a month or two, once the new balance is reported. If an item has a short explanation, such as a billing dispute that was later settled, offer it when you apply.

How long changes take

A corrected error can show up within a month or two of a dispute. On-time payments build a record over months. Business scores move as suppliers report, often monthly, so paying a few supplier accounts early for a quarter or two can lift a PAYDEX score.

If you plan to apply in the next few months, start now. If you need funding sooner, apply with the file you have, since deposits and time in business count too.

Apply when you’re ready

See all the financing options and what each one weighs, then apply from the page that fits. Applying takes a few minutes and won’t affect your credit score. We’ll review your application and match you with the options that fit.