Updated: Jan 26

As hard as you work to separate business from personal – whether you’re talking about your income, assets, or liabilities – why is it that so many small business owners are being impacted by their personal FICO score when applying for business credit?

In general, the Fair Credit Reporting Act specifically states that the personal credit report should not be considered in commercial credit decisions. Even so, the FCRA goes out the window the moment you put your social security number on the application, immediately converting your commercial credit application into a consumer credit application. This allows creditors to consider personal credit in their decision. For this, you can blame both the credit underwriters and the Patriot Act, which mandates creditors gather personal information from every applicant to help combat the funding of terrorism.

This is not to say poor personal credit scores will keep you from achieving credit approvals. Quite the contrary. Personal credit is not the prevailing factor. We have seen credit approvals run the gamut, including small business owners with 700+ credit scores getting denied for major credit cards and loans, and others with 500 FICO scores getting approved. The fact is, there is a lot more to getting an approval than just a strong FICO or Paydex score.


In reality, credit approvals are based upon a combination of these scores, but will also include your company’s gross annual and monthly income,