One challenge that small business owners face is keeping personal credit in good shape while managing a business. This challenge can test a soul. As the business grows, cash flow tightens, and personal credit may be strained due to higher balances on business credit cards. Credit cards that were guaranteed by the business owner.
The jump in business credit card balances can cause your personal credit to drop. This is because your Debt-To-Credit Ratio is affected by the higher balances. You also face the issue of more inquiries.
One recommendation is that you establish credit under the business itself. Net terms, supplier lines, and unsecured business financing can help reduce the burden on personal credit.
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