Personal Credit vs Business Credit: What Every Owner Should Know

Personal credit follows you. Business credit follows your EIN. Lenders, landlords, suppliers, and partners use them very differently.

When you sign a personal guarantee on a business loan or business credit card, both your personal and business credit are on the line. Default and your personal score drops.

When you build true business credit — net-30 vendors, business cards reporting only to business bureaus, SBA-style financing — your personal credit is insulated.

Why this matters: business credit can scale to 6 and 7 figures of available credit without personally signing. Personal credit is capped by your debt-to-income ratio and personal income.

Start by separating bank accounts, getting a D-U-N-S number, and opening 5 to 10 net-30 vendor accounts in your business name. Within 6 months you will have a Paydex score and a foundation for serious business financing.