What is one factor that affects a business owner's credit score?

Payment history on existing loans is a critical factor affecting a business owner's credit score. This aspect reflects how responsibly the business owner has managed debt obligations in the past. Credit scoring models typically analyze the consistency and timeliness of payments made toward loans and credit lines. A strong payment history, characterized by on-time payments and minimal delinquencies, leads to a higher credit score, signaling to lenders that the business owner is likely to meet future obligations. Conversely, a history of late payments or defaults can significantly lower the score, making it more challenging to secure financing and favorable terms.

In contrast to this, the type of business, market competitiveness, and business location influence a business's operational success and market position but do not directly impact the credit score. These factors are more concerned with the overall dynamics of running a business rather than the financial history that's specifically evaluated in credit scoring.