Small-business owners are more credit savvy than consumers
The editorial content below is based solely on the objective assessment of our writers and is not driven by advertising dollars. However, we may receive compensation when you click on links to products from our partners. Learn more about our advertising policy.
The content on this page is accurate as of the posting date; however, some of the offers mentioned may have expired. Please see the bank’s website for the most current version of card offers; and please review our list of best credit cards, or use our CardMatch™ tool to find cards matched to your needs.
If it’s true that the small-business sector serves as a barometer of the health of the overall economy, things are looking good in America.
Credit reporting agency Experian took a deep dive into its data on credit scores, available credit limits and debt loads to see how well the typical small-business owner is currently managing credit.
They are doing it right. Small-business owners tend to share traits associated with good credit: They are generally older, more educated and wealthier than the average American consumer. In addition, they exhibit more sophisticated credit
The average American has 4.4 credit relationships, with a total open credit limit of almost $27,000. These credit relationships include any type of debt or credit, including mortgages, auto loans, student loans, home equity loans, credit cards and personal loans. The average small-business owner has almost twice as many credit relationships, at 7.4, with open credit limits averaging more than $56,000.
Add to this that small-business owners have a mean mortgage balance of $192,000 compared to $147,000 for the typical American, and average debt repayment each month is more than twice as high for small business owners, at $2,032, versus $954 for average Americans.
Yet the greater access to credit, higher balances and larger obligations each month do not translate into difficulty managing that credit. The average credit score of small-business owners is 721, almost 50 points higher than the average American’s score, indicating that small-business owners are both taking full advantage of the credit available to them and using it responsibly.
Experian’s “Face of Small Business” study drew on a random data sampling from 2.5 million small-business owners and 1 million American consumers. Experian released its findings Sept. 15, 2016.
To use the graphic on your site, use the following code: