If you’re running a business, you have both a personal and business credit score, and both can significantly affect your financial opportunities. Whether you’re applying for an SBA loan, negotiating payment terms with vendors, or opening a business credit card, your credit standing matters more than ever.
From qualifying for loans to securing better terms with suppliers, your credit profiles play a major role in:
- Whether or not you can qualify for a loan
- What kind of interest rate you can secure
- How much you can borrow
- How long you have to repay a loan
- Your financial relationships with vendors and suppliers
If your personal or business credit isn’t where you want it to be, don’t worry, there are steps you may be able to take today to protect your business from the long-term consequences of bad credit.
1. Check your personal and business credit reports
Start by knowing where you stand. Credit monitoring is essential for spotting inaccuracies or suspicious activity that could damage your score.
For personal credit, request your reports from:
Thanks to the Fair Credit Reporting Act (FCRA), you’re entitled to one free report per bureau every 12 months. You can request all three at AnnualCreditReport.com.
For business credit, check with:
- Experian Business
- Equifax Business
- Dun & Bradstreet® (D-U-N-S® Number required)
- FICO® SBSS (used by SBA lenders)
Spotting errors early gives you the chance to dispute and correct them before they affect your loan eligibility or vendor terms.
2. Improve your personal credit score
Your personal credit still matters, especially for small businesses where personal guarantees are often required. Most SBA lenders review your FICO® score and the SBA uses the FICO® LiquidCredit® Small Business Scoring Service℠ (SBSS) to evaluate eligibility.
To strengthen your personal credit:
- Pay all bills and loans on time
- Keep credit utilization low (aim for under 30%)
- Avoid opening too many new credit accounts at once
- Don’t close old accounts unless necessary (they help with credit age)
- Dispute any errors promptly
Improving your personal credit may boost your chances of loan approval and even help you negotiate better terms with lenders or vendors.
3. Separate personal and business finances
In 2025, lenders and regulators place more emphasis on financial transparency. One of the best ways to protect both your personal and business credit is to keep them completely separate.
Here’s how:
- Register your business as an LLC, S Corp, or Corporation to establish it as a separate legal entity
- Get an Employer Identification Number (EIN) from the IRS
- Open a business bank account in your company’s name using your EIN
- Apply for business credit using your EIN, not your SSN
- Avoid co-mingling funds between personal and business accounts
Doing this not only strengthens your business credit but may also offer personal liability protection.
4. Build business credit through vendor and supplier relationships
If you're not ready for a traditional bank loan or line of credit, start with your suppliers. Many vendors offer net-30 or net-60 terms and report payment activity to the business credit bureaus.
Paying your suppliers on time can:
- Establish a strong payment history
- Build your business credit profile
- Improve your chances of securing larger credit lines later
Before signing agreements, confirm whether the supplier reports to commercial credit agencies.
5. Use business credit cards strategically
Even if your credit is less than perfect, there are business credit cards designed for new or rebuilding credit. These cards often have:
- Lower credit limits
- Higher interest rates
- Annual fees
But when used responsibly, they help you:
- Separate business purchases from personal spending
- Establish and grow your business credit score
- Show lenders that you can manage credit effectively
Look for business cards that report to the major commercial bureaus and always pay off balances in full each month to avoid interest.
Bonus Tip: Monitor your business credit regularly
Just as you would monitor your personal credit score, make it a habit to track your business credit activity. Tools like Nav®, CreditSignal by D&B®, and Experian® Business Credit Advantage can help you keep tabs on your business profile.
This is especially important if you plan to apply for an SBA loan or other types of financing in the near future. A strong business credit profile may help you qualify for larger loan amounts at better interest rates.
Bad credit doesn’t have to hurt your business
If your credit isn’t perfect today, that’s okay. What matters is the action you take to strengthen it. Here’s a recap of steps you can take right now:
- Check your personal and business credit reports regularly
- Work to improve your personal credit score
- Keep your personal and business finances separate
- Establish a line of credit with vendors and suppliers
- Use business credit cards responsibly
- Monitor your business credit profile frequently
Improving your credit takes time, but consistency pays off. Small, intentional actions today may lead to stronger credit, better financing terms, and more opportunities for growth tomorrow. Your business deserves the foundation that good credit can provide. Start building it today.
