Keeping Your Personal And Business Credit Separate

By Derrick Bailey, Commercial Lending Manager, Telhio Credit Union

As a small business owner, you should know that keeping your personal and your business financial information organized and separated is essential for your success. It not only protects your personal assets, but makes applying for business loans and lines of credit easier. Keeping them separate also ensures you don't max out or damage your personal credit line if your business faces financial issues - or vice versa. But you may find that separating your personal and business credit isn't always easy. Here are a few things to consider when working to keep your business' financial status separate from your personal:

  1. Establish your business as a separate entity: You've heard the terms LLC, Sole Proprietor, and S-Corp, but you may not have a complete grasp on what those terms mean for your business. Your tax or financial planner can help explain these options to you and help you decide which fits your business situation best.By filing your business as a separate entity, you're one step closer to separating your business finances from your personal ones.
  2. Build up your business credit: Apply for a business credit card and line of credit (to be used for business expenses only) and don't forget to pay them off on time each month. This will help build your business' credit history which can lead to higher credit scores and better payment terms. Be sure to look for a business credit card that doesn't report on your personal credit.
    • Telhio Credit Union is unique in the market in that its Business VISA credit cards help you to build your business' credit history with no minimum time AND keeps your business and personal expenses separate because it reports to a business credit bureau - not a personal one.
  3. … And keep an eye on it: After you've worked so hard to build up your business credit, don't let it fall to the wayside. Your business credit can change quarterly or even monthly. Monitoring it regularly ensures that you can address any dips or changes immediately, saving you from higher rates or unexpectedly having to pay out of pocket for inventory, equipment or other expenses.
Telhio Credit Union has a variety of business products and services, such as checking accounts, credit cards, and business loans that can help your business succeed. Contact a member of Telhio's Business Services team, or give them a call at 614-221-3233.

For more tips on separating your business and personal credit, read 4 Ways to Keep Your Business and Personal Credit Separate on -

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