Stop Using Your Personal Credit for Business
Based on insights from Ryan R. Richardson
Partner at Grundy’s Consultancy | Business Credit & Funding Specialist
Most business owners don’t realize it, but the way you handle credit can quietly sabotage your future funding opportunities.
What feels convenient today can cost you tomorrow, especially when lenders take a closer look.
If your personal credit is your business's lifeline, you're walking a tightrope.
It might feel “easier” to swipe your personal card or apply for that loan under your name.
But what you’re doing isn’t funding growth. You’re stacking risk.
And lenders? They see it right away.
As Ryan R. Richardson says:
“Using personal credit for your business makes you the liability. Not the business.”
Here’s why that’s a problem, and what to do instead.
Personal credit ≠ business fundability
Your personal FICO score was never meant to support commercial risk.
It wasn’t built to handle business-scale borrowing, and it sends the wrong signal to lenders:
“This business has no financial identity of its own.”
Even if you’re profitable, lenders will see red flags if you’re not operating with:
- A separate business entity (LLC or Corp)
- A dedicated business checking account
- A business credit profile (yes, it’s a real thing)
What lenders actually look at
Contrary to popular belief, lenders don’t just look at your personal credit.
Here’s what makes a business fundable:
✅ A registered business entity
✅ EIN (Employer Identification Number)
✅ Business checking account
✅ Business phone and address (even if virtual)
✅ Net 30 vendor accounts reporting to commercial bureaus
✅ Consistent revenue with documentation
✅ Industry classification (NAICS/SIC) that aligns with your financial profile
These are not “nice to haves.”
They’re minimum standards for serious funding.
Why this matters (even if you’re not borrowing… yet)
If you ever plan to grow, whether that means inventory, hiring, or expansion, you’ll need access to capital.
The earlier you build business credit, the faster you’ll unlock:
- Lower interest rates
- Higher approval odds
- Funding that doesn’t touch your personal score
- More negotiating power with lenders
And most importantly? You gain financial control.
Not just for today, but for the future you’re building.
Start separating today: here’s how
Here’s a simple action list to begin transitioning your credit identity:
- Form your LLC or S-Corp
- Get an EIN from the IRS (free!)
- Open a dedicated business bank account
- Set up a business address (can be virtual)
- Apply for starter vendor credit accounts
- Start reporting payments through services like NAV or CreditSafe
- If this sounds overwhelming—we’ve got you.
Our team at Grundy’s Consultancy walks clients through these steps every day.
FAQ
Why shouldn’t I use personal credit for my business?
Using personal credit puts your assets at risk and sends the wrong signal to lenders. It blurs financial lines and limits your ability to build a credible business credit profile, something lenders rely on when approving larger loans.
How do I start building business credit?
Begin by forming a legal entity (like an LLC), getting an EIN, opening a business bank account, and applying for vendor credit that reports to commercial credit bureaus like Experian Business or Dun & Bradstreet.
Can I get funding without using personal credit at all?
Yes, but it depends on your business credit profile, revenue, and structure. Many funding options require a personal guarantee early on, but the goal is to shift that risk to the business as it matures and becomes more fundable.