News: General News

Women are More Likely to Rely on Personal Credit to Finance Businesses

Friday, July 19, 2019  
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Women are opening businesses at a record pace, but they are using less commercial credit and rely more heavily on consumer credit than men, which may be limiting their personal and business financing options, according to Experian’s latest Women in Business report. 


Experian found:

  • Female business owners account for 34% of businesses and represent 22% of active commercial credit shoppers. 
  • On average, women business owners have half the number of commercial trades as male business owners and carry approximately $15,000 less in commercial balances.
  • Women have an average commercial balance of $25,000, while men have an average balance of $40,000.

For some women, the inclination to self-finance their business, is having a negative impact on their personal credit scores. Findings include the following:

  • Approximately 28% of female business owners have 10 to 19 consumer trades (credit cards, personal loans, etc.) compared with 20% of male business owners.
  • 51% of male business owners have a consumer credit score of 750 to 849, compared to 46% of women business owners. 
  • 18% of women business owners have a credit score of 550 to 649, compared to 14% of their male counterparts.

The increased amount of personal credit women business owners are using is leading to higher credit utilization rates and consumer trade counts – two factors that can negatively impact credit scores. 


“Relying on consumer credit can make it more challenging for women business owners to obtain commercial financing in the future,” added Lee. “There is a great need for more education about the impact of relying on personal credit. By developing a greater understanding of commercial credit options, women can grow their businesses more quickly and effectively while protecting their personal credit.” 


Maintaining a business credit profile separate to a personal credit profile can help business owners develop a commercial credit history and protect their personal credit profile. This is especially important should a financial mishap occur with their business. Experian recommends the following to help both male and female business owners improve and maintain their financial health while growing their commercial credit profile:


Download the Experian report.