Many folks starting a new business venture require extra finances, aside from their own, to finance their dream. However, a poor personal credit score can affect your business dreams in a big way. Many people don’t believe their personal credit and business credit go hand in hand. However, if you have poor personal credit, you may find it difficult to secure a small business loan.

In this article, we will discuss how business credit cards with rewards and other measures can help you fund your small business dreams:

1. Help start a business venture
Starting a new business requires you to be at the ready with the finances that would cover all foreseen and unforeseen expenses. For example, apart from start up expenses and staff salaries other operating expenses are sure to crop up. Take for starters the money you may have to spend on land, renting a building, equipment, materials, technology, and other resources. Most entrepreneurs would seek financing to get the funds required to start off a business through a bank or personal lender.

2. Personal credit score
Every individual is given a personal credit score, which is a rating on behalf of the credit agencies based on your past financial record (i.e., savings, investments, assets, loans and of course their repayment). This includes repayment of credit card bills, car loans, school loans, mortgages, etc. Based upon your personal credit history, a personal credit score is calculated for each individual. Unless your credit score falls between 720 and 850 you may have trouble securing a loan at all, or you may be stuck with a poor loan agreement with poor size, duration, and interest rates.

3. How a poor personal score affects your business
When you apply for a business loan, your personal credit score also is considered as a factor for approving the loan. Even though your business credentials appear good, if you have a bad personal credit score, your loan application can get rejected.

4. Higher rates for lower scores
If your personal credit is poor, then you may find it difficult to get financing for your venture from banks. Private lenders in the market are alternative sources of finance for entrepreneurs. With a lower personal credit, you would most likely be charged a higher interest rate that can affect your business plans.

5. Operational difficulties
If you manage to start a business, then your poor personal credit can hurt you while running the business. Vendors like real estate companies, utility service providers, and large suppliers may also look at your credit score. If you have a poor credit, your vendors may not give you credit and may demand immediate payment or higher rates.

6. Improving your personal credit
You are bound to face problems at different stages of your business venture if you have poor personal credit. Start improving it gradually by repaying old loans and clear pending credit card bills. Immediate rectification of your credit issues can help improve your credit score.