The Cost of Bad Credit
While qualifying for a business credit card is based off of your personal credit score, using your business credit card wisely will affect your ability to get a loan in the future.
In fact, 46 percent of survey respondents reported using a business credit card frequently to fund their businesses. About 74 percent of those expenses included office supplies and materials, but business owners said they turn to credit to pay for everything from the gas in their company cars to their office building rent.
DesMarteau recommended treating business credit just like personal credit. "A business credit score is typically used — along with debt-to-income ratios — to make lending decisions for well-established companies," he said. "Paying bills on time and not taking out too much debt will boost a score and make that business a more attractive loan candidate."
That will affect your business credit interest rates as well. Especially if your business is just starting out, many lenders will look to your personal credit score as a marker of how well you might manage your money as a business owner. "Prioritize things like making payments on time and keeping credit utilization low in order to build your score," Pukas said.
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