Personal involvement in business:

Most small business owners use the limits on their cards and life savings when they start up their company. This means that they get loans on their name rather then in the name of the company, they thus have to give personal guarantee on loans. They also use up the available personal limits to them and this means their credit history gets a low score in the system. They also happen to have no available back up plan to fall back to if things don't work out as planned or if they need some personal expenses.

The disadvantage of this plan is that your company will not build a paydex score at all, and your personal guarantee would be needed each time you apply for a loan. This may not turn out to be very smart as most lenders look for your corporate credit score before they approve any loan to the company.

Building Corporate Credit:

Building the right corporate structure is essential to building Corporate credit. Through diligent work you will be able to build up your credit rating for your company. This will need to be done through effective corporate policies and not haphazard decisions.

If through indifferent practices you have a bad Fico score, you can still mend it by learning how to build corporate credit without using your personal credit.