Small-business owners are more credit savvy than consumers

Experian study finds shopkeepers have higher credit scores than average Americans

Sabrina Karl
Personal Finance Writer
Data whiz and visual storyteller


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 management across every measure evaluated in the study.

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.

See related: Take a businesslike approach to improving your credit, Infographic: The financially happy now outnumber the unhappy, More infographics

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Updated: 02-17-2019