How Good Personal Credit Could Help Small Business Owners


SAN JOSE, Calif., July 6, 2022–(BUSINESS WIRE)–You can enjoy many personal benefits when you achieve a good FICO® score. Yet you might not realize that good personal credit can make things easier for your small business, too. Read on to learn three ways to leverage a good FICO score to your advantage as a small business owner, from myFICO.

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1. It might be easier to qualify for small business financing.

After registering a small business with your state (such as a corporation or LLC) and applying for an Employer Identification Number (EIN) from the IRS, you may be able to establish credit for your business. Yet, even if you build good business credit, your personal credit could still influence your ability to access certain types of small business capital (e.g., business loans, SBA loans, business credit cards, lines of credit). business credit, etc.).

Lenders often view small businesses as extensions of their owners. Therefore, a lender may want to review how you have handled your personal credit obligations in the past before deciding whether or not to approve your application for business financing. And certain credit reporting systemsas the FICO® Small Business℠ Scoring Service(SBSS℠), may consider factors from both personal and business credit information.

2. Your business could receive better financing offers.

Not only good staff credit score potentially improve your chances of qualifying for small business financing, but it could also lead to better loan deals. Consumer and small business lenders often reserve their most attractive financing offers for applicants with good to outstanding FICO® scores.

Of course, it is important to ensure that your business also meets the qualification criteria of a lender in other areas. A good FICO® score alone does not guarantee loan approval or a lower interest rate. Your company’s time in business, financial details, existing debts, and other details could also play a role in its ability to qualify for competitive small business financing options.

3. You could help your business establish its own credit.

Good business credit can be a valuable asset to a small business (just like a good FICO® score could benefit you as an individual). If you already have good personal credit, you may find it easier to establish business credit in your business name.

Establishing good commercial credit begins with opening commercial lines and accounts with vendors and vendors who report to commercial credit bureaus (eg, Dun & Bradstreet, Experian, and Equifax). If you have good FICO® scores based on your consumer credit reports, it could help you qualify, depending on the lender’s approval criteria.

If a lender approves you for a business line, the next step is to manage the account responsibly. It is essential to pay your business credit obligations on time, to keep your credit utilization rate have few business credit cards and maintain other good credit management habits. Otherwise, the account or business line you opened to help build your business credit profile could end up hurting your business credit score.

Separate professional and personal finances

It’s generally wise to separate your personal and business data as much as possible. The same goes for your personal and professional credit. Nonetheless, there are times when, as a small business owner, these two worlds can intertwine.

As mentioned, a commercial lender may look at your personal credit when applying for commercial financing for your small business. You may also find that some commercial lenders require you to sign a personal guarantee when you take out certain commercial loans. (A personal guarantee means that you agree to take responsibility for a debt if your company does not repay according to the terms of its financing agreement.)

Still, you should always aim to separate professional and personal matters when you can. Instead of putting business charges on a personal credit card, for example, you might consider opening a business credit card instead. Just make sure you know the card issuer’s credit reporting policy. If a credit card company reports a small business credit card to the consumer credit bureaus, the account (and the credit utilization rate on that account) could still impact your personal FICO® scores. .


Good personal credit has the potential to pave the way for small business owners in several areas. From helping you get affordable business financing to allowing your business to build its own credit, good personal credit can make your small business easier to navigate in many ways.

If you want to manage your personal credit, you can find out more about the habits of individuals with excellent FICO scores. It may also be helpful to understand that factors that make up your FICO scores in the first place.

About myFICO

myFICO makes it easy to understand your credit with FICO® Scores, credit reports and alerts from all 3 bureaus. myFICO is the consumer division of FICO – get your FICO scores from the people who do FICO scores. For more information, visit

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Elizabeth Warren


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