Business Credit vs. Personal Credit

Why you should separate business credit from personal credit

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Business vs. Personal Credit

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.

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