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10 Tips to Get Your Personal & Business Credit in Order

While your business is in its early stages and still building a credit record, potential creditors may look at your personal credit to decide whether to do business with your company. That’s why it’s important to get your personal and business credit in order from the beginning. Here are 10 steps for doing so.

  1. Check your personal credit report. The three major credit bureaus are required to give consumers a free credit report once every 12 months. Visit to get your reports. Correct any errors you find.
  2. Get credit cards under control. You do need credit cards to establish a credit score. When evaluating your creditworthiness, creditors compare your available credit to the amount you use. Keep balances on each card to 20 or 30 percent of the available credit. Pay cards in full and on time each month.
  3. Decrease debt. Paying off debt boosts your credit score. However, if you pay off a credit card, don’t close the account. Having too few cards or having only newer cards can hurt your credit score.
  4. Choose a business bank. Consider all the financial services you might need and whether the bank can provide them. Don’t forget about community banks and credit unions, which often have excellent services for small businesses.
  5. Get business credit cards. If your personal credit is weak, ask about “secured” business credit cards. You will need to put down a deposit (typically $500 to $1,000) against your initial credit line. As you establish a payment history, you can increase your credit line.
  6. Establish business lines of credit. Make sure your paperwork (tax ID number, business bank account, financial statements and business plan) is in order before approaching vendors. Once you’ve obtained credit, pay on time.
  7. Ensure transactions are reported. Businesses are not required to report transactions to credit reporting agencies, so before you choose a supplier, ask whether they do so. Only use suppliers who report your information; otherwise, you won’t build a credit history.
  8. Seek diversity. To build a stronger credit record, establish different types of credit, including revolving credit, trade credit, loans and leases.
  9. Minimize debt. Keep business debt at a reasonable level for your industry and situation. Creditors will be leery if they see your company has excessive debt.
  10. Monitor your business and personal credit on an ongoing basis. Your business banker can help ensure that you’re doing everything possible to keep your credit in good order.

Rieva Lesonsky is founder and president of GrowBiz Media, a content and consulting company that helps entrepreneurs start and grow their businesses. Before launching her business, she was Editorial Director of Entrepreneur Magazine. Follow Rieva at and read more of her insights on

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