What are business credit scores?

See how a good VantageScore and a good FICO score can differ

While VantageScores and FICO scores both offer credit scores between 300 and 850 and consider the same core factors, they weigh those factors differently, and specific numbers can have different meanings depending on the type of score.

How to rebuild your credit score

It's easy to let your credit score slip without realizing it. Checking your credit score and getting to know what's on your credit report are the first steps to getting to the "700 club," or "good score" range, according to one financial expert.

What your credit score actually means

The modern iteration of credit scores hasn’t been around for that long—it was invented just a few decades ago, in 1989. This video outlines how the credit scoring system has evolved and become more complex since then. Plus, it explains what your credit score actually means, what factors impact your score, and more. Watch it here.

Credit reporting started as a service for businesses rather than consumers

In the 1700s US economy, consumer credit reporting wasn't necessary. A loan to a farmer for agricultural supplies, for instance, would inevitably help them purchase both personal and business items.

What is VantageScore?

The three major credit bureaus introduced the VantageScore credit score in 2006 as a competitor to FICO. It’s calculated slightly differently from a FICO score, though just like the FICO score, it’s widely used by lenders.

Why countries have credit ratings

Sovereign credit ratings work like national credit scores, measuring a country’s ability and willingness to repay its debt. Moody’s, S&P, and Fitch are the major agencies assigning these ratings, which influence borrowing costs and investor confidence.

Private credit is a nonbank loan made directly to a business

Similar to private equity, private credit is part of the private markets world. Both strategies offer illiquid, privately negotiated investments for privately held companies. Unlike private equity investors, however, private credit investors typically do not take ownership stakes in the companies they invest in.

How credit scoring works outside the US

If you move outside the US, you won’t get to take your credit score with you. Credit scoring systems work differently in other countries. In the UK, for instance, being registered to vote improves your credit score.

Most people will probably never hit a perfect 850 credit score for a variety of reasons, including the fact that younger borrowers are at a disadvantage as credit history length accounts for 15% of one's score.

Five primary factors determine your credit score

Your credit history is used to calculate your credit score. It includes information such as how often you miss payments (on credit cards, for instance), the types of financial accounts you hold, how long you’ve held those accounts, and more.

Privacy concerns in the credit scoring system

Because credit scores use a lot of personal information (such as whether or not someone makes credit card payments on time), some worry their privacy is being compromised in the data collection process.

Why private credit is attractive to both businesses and investors

While investors are attracted to the high rates, private credit is particularly attractive to mid-sized businesses that are too small for bank syndication and want faster, more flexible financing options.

How VantageScore and FICO’s algorithms calculate credit scores differently

VantageScore and FICO weigh various factors that determine your credit score differently. For instance, while your payment history makes up 40% of your VantageScore, it only makes up 35% of your FICO score.

The private credit industry—which offers nonbank loans directly to businesses, particularly privately held midmarket companies—grew from a $250B asset class in 2010 to around $1.5T in early 2024.

Why consumers could soon see the impact of buy now, pay later loans on their FICO credit scores

FICO rolled out its first-ever BNPL-specific credit scoring models in June 2025. While missed installments can now negatively impact a credit score, there's also the potential for on-time BNPL installment payments to help boost scores.

The three major credit bureaus were created in the mid-1900s to sort local credit reporting into national databases

In the 1800s, credit bureaus went into business to help lenders make decisions. But today's three major credit bureaus, Experian, Equifax, and TransUnion, didn't become the industry leaders they are today until the 20th century, around the same time FICO was founded.

An explanation of hard credit checks vs. soft credit checks

Some buy now, pay later services do a soft credit check rather than a hard credit check, like credit card companies would do when someone applies for a card. While hard credit checks can impact your credit score, soft pulls typically do not.

How FICO and VantageScore weigh factors in credit history differently

VantageScores are sometimes lower than FICO scores because the algorithms that calculate the two scores weigh the factors that influence them differently. For instance, VantageScores typically weigh payment history more heavily than FICO scores.

How is credit reporting regulated in the US?

While the three main credit bureaus and the credit scoring companies aren't government entities, they are subject to certain US government regulations, such as the Fair Credit Reporting Act.

How to check your credit score

Contrary to popular belief, checking your credit score doesn’t hurt your credit. Many credit card companies show your score when you log into their app online, but there are other ways to check it.

Credit reporting's earliest origins in the 1700s resemble a game of telephone, with rural merchants asking their most esteemed neighbors to vouch for them to sleuthing urban lenders.

How the credit scoring system could change

Factoring rental payments into credit scores is just one proposed change some have suggested making to today’s credit scoring system to cater the system to renters as well as homeowners.

Consequences of a bad credit score

A bad credit score can lead to spending roughly $100K more on a typical mortgage. Poor scores also prevent you from getting certain jobs, apartments, and more, hindering you from building wealth in the long term.

Borrowers were increasingly defaulting on private credit loans as of early 2026

Risks in private credit investing include the industry's lack of transparency and the ability of businesses to borrow more than a bank might allow against their debt. Some borrowers in early 2026, for instance, likely did not expect interest rates to be so high for so long, which could be contributing to an uptick in defaults.

Some argue that credit reporting promotes economic inequality in the US

Although today's credit scoring system is much more objective than, say, the credit assessment system of the 1700s, some argue there's still room for improvement, with critics saying the current system is still discriminatory. For example, while mortgage payments have long been automatically reported to credit bureaus, rent payments (the primary housing expense for most lower-income Americans) historically haven't been reported unless a payment was missed.

Some private credit funds trade on the stock market

These funds, which trade at market prices, are called "public BDCs," which stands for "business development companies." For instance, the global alternative investment manager Ares Management Corp. has a public BDC.

The private credit industry offers nonbank loans directly to businesses, particularly privately held midmarket companies.

Do student loans affect your credit score?

While student loans can impact your credit score, that's not necessarily a bad thing. Repaying the loan on time can strengthen your credit score, whereas paying late can hurt it. To find out more about how student loans can impact your credit score, read this article.

The Fair, Isaac and Company (FICO) was founded in 1956

When they created FICO, William Fair, an engineer, and his cofounder, Earl Isaac, reasoned that financial data could help a wide variety of companies improve business decisions. FICO created the first credit scoring system to help lenders be more objective.

Credit unions, explained

Proponents of credit unions often point to the fact they’re not-for-profit cooperatives instead of for-profit businesses as a key selling point. This explainer dives into what this looks like in action—instead of pocketing the profits from interest rates, credit unions reinvest that money into the products and services they offer. For customers, this tends to create a more personal and community-oriented experience.

Credit scores seriously suffer when individuals file for bankruptcy, and there’s no easy fix

Those who file for Chapter 7 must wait 10 years before the bankruptcy is removed from their credit report. For Chapter 13, the wait time is seven years.

Although credit unions offer many of the same services as traditional banks, they differ in that credit unions operate with not-for-profit status and are run by and for their members.

Direct lending is the most common form of private credit

Other types include opportunistic credit, special-situations credit, mezzanine finance, venture debt, infrastructure debt, real estate debt, and more. All of these sources of capital technically create private transactions, so they can all call themselves private credit.

Both individuals and businesses can establish trusts

Business trusts can allow trustees to manage a beneficiary’s stake in a business, and more. There are many different specific types of business trusts.

Retail investors cannot directly invest in private credit funds—but other financial vehicles can offer exposure to the industry

For example, as some US regulations have loosened in recent years, retail investors have begun to get exposure to the private credit market via ETFs that invest in publicly traded financial vehicles with private credit exposure, such as BDCs.

Credit card issuers determine your credit limit using your payment history, income, and more

Some credit card issuers also take your other payment obligations into account when determining your credit limit, such as the cost of your rent or alimony.

Credit limits can be lowered as well as increased

Some common reasons for someone's credit limit being lowered include missed payments, an inactive account, and more.

Before the modern banking system, most lending resembled private credit

Before the creation of the modern banking system, the majority of loans were negotiated directly between the lender and the borrower—effectively making them private credit transactions.

Rewards credit cards can offer points, travel miles, and more

For every dollar that a cardholder spends on a rewards credit card, they can also receive benefits such as cash back, airline miles, and more. For many, rewards are the reason they make so many purchases on credit cards in the first place.

Credit card companies make money through interest, annual fees, and more

They also profit from interchange fees, the fee the retailer has to pay the credit card network in order to facilitate a transaction. The fee is typically between 1% and 3% of the transaction amount.

Direct lending typically involves 'senior loans'

Direct lending, the most common subtype of private credit, typically involves senior loans which are secured by a company's assets. "Junior capital," on the other hand, is a type of private credit that is not secured by a company's assets, making it generally riskier than direct lending.

Private credit and private equity are both alternative assets

Like private equity fund managers, private credit managers typically raise funds directly from investors, lending to corporations. The borrowers can benefit from the lack of middlemen and resulting efficiency, and the lenders often yield comparatively higher returns.

Financial institutions check for lots of things before authorizing a purchase

Before authorizing a purchase, card issuers consider whether or not the cardholder has a high enough available credit limit to make the purchase, where the purchase is being made in order to reduce fraud, and more.

Private companies are often harder to value than public companies

That's partly because there isn't readily available stock information, and financial accounting is kept behind closed doors. Typically, determining the value of a private company involves, among other things, closely comparing the private company with its competitors.

Charge cards are different from credit cards

Unlike credit cards, charge cards often don’t have a preset credit limit, but cardholders need to pay off the entire balance every month.

Gap and Sephora now accept BNPL, despite paying up to 8% per sale

Despite these merchants paying roughly 2% to 8% of each sale's cost (more than they pay for most credit card processing fees), they're signing on, in part, because BNPL can help them improve their conversion rates at checkout.

Why private credit has faced challenges in recent years

The factors that some experts say are driving what could be private credit's most challenging era since the 2008 financial crisis include global economic uncertainty around trade and tariffs, investor fears about the amount of money being spent on artificial intelligence, and more.

The bond market is where bonds and other debt securities are traded

Bonds are fixed-income investments allowing individuals to lend a specific amount of money to a large entity, like a government or corporation, for a set amount of time in return for interest paid out over the life of the loan. The bond market is widely considered a key economic barometer.

The Consumer Financial Protection Bureau is looking closely at BNPL

Given the lack of data around BNPL services in comparison to other financial products such as credit cards, the CFPB has conducted research to better understand BNPL products and how they could harm and benefit consumers.

Bond yields are the returns investors earn from a bond's interest—and they're a key economic barometer.