Many small business owners use personal credit to run their business. However,
doing so could put you at risk if your business is ever in trouble. Plus, many creditors
today are moving away from relying on personal credit alone when judging a business’s
financial health since personal credit is not considered an ideal predictor of business
behavior. Furthermore, smart creditors are taking advantage of new blended commercial
scoring tools that integrate both personal and business credit attributes to assess
and predict small business risk.
However, if you are a sole proprietor, your personal credit and your business credit
are closely linked in the eyes of banks and other lenders. So it is important to take
steps to protect both. You should monitor, evaluate and protect your credit standing
just as you would protect any other business or personal asset.