Your Business and Personal Credit Scores are About to Mix

Many small business owners likely think that their business credit scores and their personal credit scores don’t have an effect on each other. That’s never been entirely true – and recent developments mean that business and personal credit scores are going to start impacting each other even more directly.

According to a report from the Credit Union Times, credit unions and other lenders will have access to a new Small Business Administration-sourced credit score starting next month. This score will combine an entrepreneur’s personal and business credit scores, essentially making them one unified credit rating if/when you apply for an SBA loan.

Maria Contreras-Sweet, administrator of the SBA, said that her office has been trying to create a scoring model that erased the lines between a business’ score and an individual’s for more than 10 years now. She said these new scores will eliminate the need for time-consuming analysis of business’ cash flow.

There’s another change coming to the small business loan process: the SBA will be launching SBA One, according to the report, a website that will allow for automated uploads of documents, forms and even allows for electronic signatures, said Conteras-Sweet. This will help to speed up the processing times normally associated with applying for small business loans, and will help individuals to receive a judgment on their applications faster.

To learn more about your business credit profile, click here and here.