COSTA MESA, Calif.—A new study shows that female small business owners have slightly lower credit scores than their male counterparts.
Pulling data from its small business analysis, Experian explained that the average commercial credit score for a woman-owned small business is 34, while the average score for a male-owned small 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% of male-owned businesses have at least one open commercial trade account, while the same can be said for only 18.5% of women-owned businesses.
• More than 25% of female business owners have between 10–19 open trade lines on their personal credit file, compared to 17.5% 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
Experian’s analysis also looked at the top 10 industries for male- and female-owned businesses. There were several industries that ranked in the top 10 for both genders, including business services, retail stores, building maintenance, restaurants, real estate and management consulting. Those specific to men were general contracting, motion-picture and video-tape distribution, general automotive repair and plumbing, while those specific to women were beauty shops; personal services; child day care; and gift, novelty and souvenir stores.