How Business Owners Can Build Their Personal Credit

There is no denying the fact that you have a lot on your plate. From hiring new employees and interns to SEO for your website to prospecting for new business, there is always something to keep you busy.

Even so, you need to find time to build your personal credit. Fortunately, with the right strategy in place, you can do so in a timely manner.

Here are a few high-level tips to follow:

1. Use Credit to Your Advantage

When attempting to build credit, many people believe that the best approach is to avoid debt altogether. This isn’t the right strategy. Instead, you want to use credit to your advantage, proving that you have what it takes to make responsible decisions.

When using credit, such as a credit card, make sure you always pay the minimum due (ideally more) by the due date. Missing a payment won’t build your personal credit, it will drag it down.

2. Borrow from Lenders that Report to Credit Bureaus

It’s easy to believe that all lenders report to credit bureaus, but nothing could be further from the truth.

Before taking out a loan, you’ll want to double check on this. If a lender doesn’t report your activity to the credit bureaus, it won’t do anything for your credit score.

A small business loan, for instance, can be a great way to build your credit, as long as you pay on time. When you combine on time payments with a lender that reports your activity, you’ll end up in a much better place.

3. Check Your Credit Report for Mistakes

Are you under the impression that your credit report is accurate? While you may be right, you’ll never know until you take a closer look.

It’s important to review your credit report once a year for accuracy. If everything checks out, you can leave it be for the time being. However, if you come across any mistake, no matter how inconsequential it may appear, don’t hesitate to take immediate action.

Contact the credit bureau to ask about the error and learn more about how to fix it. Yes, it can be a pain in the neck to do this, but it’s a step you need to take nonetheless.

Get this: approximately 20 percent of Americans have a mistake on their credit report.

4. Don’t Max Out Your Credit Cards

As noted above, it’s a good idea to use your credit card from time to time. This can have a positive impact on your credit score, as long as you make your payments before the due date.

But here is something that you should keep in mind: You don’t want your credit card balance to get too big, as this can hold you back from reaching your goals.

One of the primary factors in calculating your credit score is your balance against your credit limit. So, it would be in your best interest to avoid maxing out your credit card.

Tip: If you find yourself reaching your limit, do your best to pay down your credit card balance as quickly as possible.

5. Don’t Let an Account go to Collections

This may not sound like a big deal, but it can drag down your credit score.

Just because you pay off a collection account doesn’t mean it will be removed from your credit report. Unfortunately, this will remain in place for a period of seven years.

So, if a creditor is threatening to send an account to collections, it’s important to work with them to avoid this.


You may not be able to repair your credit overnight, but you can do so in a reasonable amount of time if you stick to your plan and remain patient.

You should never tell yourself that bad credit isn’t a big deal. This is something you need as a business owner, as it can come in handy when funding expenses, expanding, and much more.

When was the last time you reviewed your credit report and score? Did you like what you saw, or do you realize that you need to improve your situation in the near future? Share your past successes and failures in the comment section below. Your guidance may be able to help another small business owner avoid a similar situation.