Why Personal Credit is Important for Business

If you did not know already, your personal credit affects your business credit. Although this might at first seem to be a bit odd, there are many reasons as to why this is the case.

First of all, your personal credit tells a story about who you are and what has happened to you. For example, if you have had any bankruptcies, liens, or you have not paid off credit companies or other companies, this will all come up on your credit report.

All this information tells a story about you, how you are and how you decide to operate.

The next major factor is that a business is interested in your ability to pay off a liability. For example, if you were having issues with the business, or you did something wrong that you were liable for, what is your personal ability to pay off these debts?

This especially applies for small businesses, where quite often the personal and business finances are intertwined, with many companies using the business account for personal use, and using personal cards for business use.

There are many things you can do to improve your personal credit score, but the most important thing to do first is to get a full personal credit report. You should see what your credit score is and what has been reported on you.

Make sure you spend time to evaluate this credit report, that the information reported is accurate, and that any closed accounts are marked as settled.

Ensuring the accuracy of the credit report is a key starting point. At this point, you should aim to have a strong credit score. In general, a target of 700 and above is a good goal.

Following a self-repair guide will generally get you to where you need to be. If you need to get there quicker, there are many professionals out there who can help you get the right mix of credit usage, as well as give you strategies to get where you want to be.

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