Personal Credit Rating

One of the main reasons for building business credit is to get away from having all of your company’s business financing tied to you personally.

By building strong business credit scores you will be able to secure vendor lines of credit, business credit cards, vehicle leases and many other types of financing using only your business credit.

However, beyond that, there is still more to the equation that many business credit building companies don’t want to talk about.

In today’s current lending and credit markets, an owner’s personal credit rating does play a role in the process.

Did you know banks and conventional business lenders are looking at both personal credit ratings and business credit scores?

If your business credit profiles are strong they may not require a personal guarantee, but they will still factor your personal credit history and scores into their underwriting for initial approval.

Let me explain, if a business owner (anyone owning 10% or more of the company) or officer of a company has a personal credit rating above 700, then more financing opportunities become available at lower interest rates and a much higher rate of approval.

Truly separating your personal from business credit will better protect your personal assets and personal credit. However, there is more you can do now to ensure your scores are optimized and your identity is protected from theft and credit fraud.

First, check all three of your personal credit reports to verify their accuracy.

If you have derogatory items on your reports then you should address them as soon as possible and may even consider enrolling with a reputable credit repair service.

If you do plan to apply for business financing at a bank then you will need to have at least a 680 or higher credit score. If you’re lacking in the personal credit department and need to add some positive trade lines then consider opening a personal line of credit.

By improving both your personal and business credit ratings, you will open up much more funding opportunities to your business at better rates, terms and pricing.

Keep in mind there are new bundled business credit card packages that are ideal for business owners with a solid personal credit rating. These credit packages are considered business credit friendly because the card issuers only report to the business bureaus and not your personal reports.

In a nutshell, optimizing your personal and business credit ratings will only benefit you and provide greater leverage overall.

Looking to build your personal and business credit ratings? Become a member of my Business Credit Insiders Circle and gain access to a proven step-by-step business credit building system. A system that provides you access to personal lines of credit, vendor lines of credit, fleet cards, business credit cards with and without a PG, funding sources and lenders that report to all the major business credit bureaus. Submit your name and email below for details and receive a free business credit building audio seminar ($597 value) =>

About the author

Marco Carbajo is a business credit expert, author, speaker, and founder of the Business Credit Insiders Circle. He is a business credit blogger for AllBusiness, a subsidiary of Dun and Bradstreet and author of “Eight Steps to Ultimate Business Credit” and “How to Build Business Credit with No Personal Guarantee.” His articles and blogs have also been featured in the SBA Community, Veterans United, American Express Small Business, Business Week, The Washington Post, The San Francisco Tribune, Scotsman Guide, Alltop, Entrepreneur Connect, and Active Rain.