Q: Should I try to move a negative mark on my credit report to my business credit report?
Small business experts always recommend separating business from personal finances so you don’t have to rely on personal credit to finance your business. Also, keeping them separate can help you prevent business liabilities affecting your personal life. Still, this can be tricky to do for small business owners. As you’ve experienced, small business owners often have their business and personal credit linked because they have a short business history and may not qualify for business credit.
In reference to your question, you should definitively explore the possibility of moving your personal credit account to your business report. However, it is hard to predict if you will be successful. It all depends on your credit card company and your account agreement. Usually, most companies issuing business cards only report to your personal credit bureaus if you have fallen behind on your payments or if you are using most of your available credit. In your case, you were about three months behind, which is one of the hardest offenses to get rid of. I would recommend that before you contact your credit card company and ask about this possibility, you also attempt to remove this negative information from your personal credit report. If you are successful, both your personal and your business credit report will benefit.
You can ask your credit card company to remove the negative information through a very compelling goodwill letter. Since you mention that you are currently investigating what happened in 2013, this may be a good moment to gather new information and write a short, simple courteous letter to ask for a “goodwill adjustment” in your personal credit. Make sure you reference your outstanding credit history and explain the circumstances that contributed to these late payments. It’s possible that if these are the only late payments you’ve had, your credit company may grant your request. But, there aren’t any guarantees because credit card companies are under no obligation to comply with these requests.
You can also focus on building your business credit by paying your creditors on time and establishing business credit with companies that report to the businesses credit bureaus (Equifax, Experian and Dun & Bradstreet). You should note that even though your personal credit is reviewed when you ask for business credit, it is not the only determining factor. The age and business type/industry also determine the risk level associated with your company. So, once you are ready to make a decision, understand that the outcome will mostly depend on the goodwill of your creditor. Focus on what you can continue to do to build your business and personal credit while keeping them separate.
For a comprehensive and personalized review of how to best separate your personal and business finances, visit http://debtrelief.nfcc.org/smallbusiness/ or call toll-free 844-359-3792 to speak with an NFCC certified financial professional.
Barry Coleman, Vice President of Counseling & Education Programs
Barry Coleman has over 16 years’ experience in the credit counseling industry previously holding several management positions in training, regulatory compliance, and financial counseling. Barry holds a Bachelor of Arts Degree in Organizational Management from Ashford University and a Master’s of Business Administration Degree from Ohio University. In addition, Barry served over 32 years in the United States Air Force and the Air National Guard, retiring in 2010 as the State Command Chief Master Sergeant of the Virginia Air National Guard.
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