An Experian White Paper “Predicting risk: the relationship between business and consumer scores”
Experian completed a study which analyzed proprietary data from its Business Owner Link database. This database makes the connection between small-business owners and their home addresses. With Business Owner Link, it is possible to check both the business credit as well as the personal credit for a business owner.
To complete this 4 year study, Experian examined the credit report information of about 50,000 small businesses and their owners. By studying the credit data, both personal and business, Experian revealed, “that business indicators are best at picking up the early signs of small-business failure and that credit scores that blend business and consumer information are the best overall at providing the earliest indication of trouble.”
In this report, Experian also covers: the methodology behind the study, the big picture – “Overall, the ‘business’ credit deteriorates first more often than the business owner’s personal credit.”, how the size (or number of employees) of the small business plays a role, how the age of the small business has an effect on their credit, and the patterns Experian found, which “goes bad first” personal or business credit, and last but not least – the advantages of using blended reports.
Click here to read the full Experian “Predicting Risk” - White Paper