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Credit Management

USA - Small-business analysis shows gender differences in credit management

By CreditMan Wednesday, February 25, 2015

USA - Experian®, the leading global information services company, today announced new insights from a recent small-business analysis that showed small-business owners' payment behaviour and credit management varies by gender. The analysis shows women business owners having a slightly lower commercial and consumer credit score than men. For example, the average commercial credit score for a woman-owned business is 34, while the average score for a male-owned business is 35. Similarly, the average consumer credit score for women business owners was 689 compared to male business owners at 699.

"Maintaining a positive credit profile is a powerful piece of advice for consumers and business owners, regardless of gender. Having good credit can make a difference in getting access to funds to help your business grow," said Peter Bolin, Experian's director of consulting and analytics. "Without access to this capital, it forces business owners to fund their enterprise through personal loans, which could put their personal credit at risk if the business struggles. This is especially troubling for women-owned businesses, as our research shows their credit scores are lower and take longer to pay their bills than their male counterparts."

In terms of payment behavior, the average number of days beyond contracted terms that male business owners pay their bills is 8.1 days, whereas women pay their bills 8.4 days past due.

During the analysis, Experian also reviewed additional credit attributes of small-business owners and found that:

  • More than 22 percent of male-owned businesses have at least one open commercial trade account, while the same can be said for only 18.5 percent of women-owned businesses
  • More than 25 percent of female business owners have between 10–19 open tradelines on their personal credit file, compared to 17.5 percent of male business owners
  • In the last 24 months, female business owners had an average of 1.3 personal accounts become 90-plus days past due, while male business owners had an average of 0.9 go delinquent

Source - Experian press release