topic Re: Is business utilization different? in Business Credit

Is business utilization different?

Expansion — Wed, 19 Apr 2023 01:48:33 GMT

Question: on the personal side, I understand utilization is important - keeping utilization below 47%, so I can continue to receive 0% BT offers as I pay down my balances.

Is business utilization the same? Or different? If it's different, how?

I look forward to hearing insight from the business credit experts!

Re: Is business utilization different?

SouthJamaica — Wed, 19 Apr 2023 13:19:32 GMT

@Expansion wrote:
Question: on the personal side, I understand utilization is important - keeping utilization below 47%, so I can continue to receive 0% BT offers as I pay down my balances.

Is business utilization the same? Or different? If it's different, how?

I look forward to hearing insight from the business credit experts!

[I always thought] Utilization doesn't mean a thing on the business side, from a scoring perspective.

But @JoeRockhead just posted some persuasive evidence that it does count So I stand corrected.

Re: Is business utilization different?

JoeRockhead — Wed, 19 Apr 2023 12:58:05 GMT

According to Experian Business, and their simulator, they do consider how much of your total available CLs are being used. You can see the difference in score as shown in the below screen shots of their score planner based on low usage, vs high usage.... Vastly different from what this usage would do to your personal cards/scores, but here, it's still in the higher score ranges with 90% usage, but does affect the projected score. I'd be more concerned with payment history, and having an adequate number of tradelines.

Re: Is business utilization different?

TMDSCT — Wed, 19 Apr 2023 13:02:59 GMT

Thanks for the reference, interesting how the two differ

Re: Is business utilization different?

SouthJamaica — Wed, 19 Apr 2023 13:07:48 GMT

@JoeRockhead wrote:
According to Experian Business, and their simulator, they do consider how much of your total available CLs are being used. You can see the difference in score as shown in the below screen shots of their score planner based on low usage, vs high usage.... Vastly different from what this usage would do to your personal cards/scores, but here, it's still in the higher score ranges with 90% usage, but does affect the projected score. I'd be more concerned with payment history, and having an adequate number of tradelines.

Well then I stand corrected

Re: Is business utilization different?

Expansion — Fri, 21 Apr 2023 02:47:23 GMT

Thank you @JoeRockhead, this is really helpful!! I appreciate you posting the simulations here!

Re: Is business utilization different?

JoeRockhead — Fri, 21 Apr 2023 11:25:44 GMT

You're very welcome @Expansion and in case you didn't know, you don't have to be signed up with them to play with their score planner. Anyone can go to their site and use it for free. Just fill out the initial questions and once you hit "continue", you'll see your estimated score on the next page, then at the top click the "interactive" tab and that will bring up the page with the sliders where you can play with different values/scenarios.

Re: Is business utilization different?

Expansion — Fri, 21 Apr 2023 18:21:35 GMT

Thanks for the tip, @JoeRockhead !

Business Utilization

URHomeInvestments — Sun, 23 Apr 2023 01:01:43 GMT

This is excellent to know. Thanks so much for sharing the content, and that planner. @Expansion and @JoeRockhead