Small-business owners are more credit savvy than consumers
Experian study finds shopkeepers have higher credit scores than average Americans
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.
To use the graphic on your site, use the following code:
- Retailers say ‘Less signing, more PINs’ for credit card purchases – No-signature retailers may be more common than signature retailers within the next year, according to a new study ...
- Millennial mobile payment users display costly card habits – Millennial mobile payment users have more assets, higher incomes and higher levels of education than non-users, but they're also more likely to pay only the minimum on their cards and incur late fees, new research shows ...
- Despite EMV, most stolen card numbers come from chip-card-present transactions – A new study shows that the majority of stolen card numbers for sale on the dark web are still coming from "card-present" transactions, and almost all of them involve chip cards ...