The NSBA report also shows that 87% of small business owners could separate their business and personal credit files. Their stats from December 2017 show:

87% could choose to position their business to no longer be tied to their personal credit history because they are incorporated or have established an LLC. They are also protecting their personal assets should the business fail, but only if they have not provided personal guarantees on debts.

Separating your personal and business credit insulates one from the other in the case of unexpected downturns personally or in business. Wolters Kluwer  recommends  the following steps to make it clear that the business operates separately from the owner. Most businesses will have already taken many of these steps:

Review what business credit agencies consider when calculating your credit score so you are clear on how to manage your finances.

Consider paying your bills ahead of time as that can improve your score.

Also, consistently use your business credit cards and keep them paid off monthly to exhibit excellent credit utilization.

 
Even if you do not plan to borrow money now, bear in mind that statistics show  29% of small businesses fail because they run out of cash. Even if you plan well, it is impossible to anticipate all the variables that can affect your business.

Being able to get a loan to expand, hire new employees, take on a big client, or deal with unexpected emergencies provides peace of mind. Having a credit rating that allows you to get favorable interest rates and credit terms with both banks and vendors will speed your success.

* An excerpt from an article written by Gail Gardner

 
The post *The Importance of Separating Business and Personal Credit appeared first on Cardinal Business Financing, Inc. .