Banks Review Business Owners’ Personal Credit Before Lending

Smart Answers Columnists, Karen E. Klein, recently addressed an important question: Do business loans show up on personal credit reports? in a BusinessWeek article. Her response will come as a surprise to most business owners…Yes.

Banks are starting to report small business loan payment histories to some of the top credit reporting bureaus, however, there’s no uniform policy in place yet. Plainly put, banks are starting to rely more heavily on consumer credit scores because personal repayment history has proven to be predictive of how likely a business is to pay back its loans.

“It will depend on what bank you’ve got a loan with and what kind of reporting they do,” Jordan Peterson, senior vice-president for business banking at PNC Financial Services Group¬† said in the article. He suggests that small business owners ask their bank loan officer or bank manager about your bank’s policy on sharing business loan data with credit bureaus.

Click here to read the entire response: Personal Credit Reports Reflect Business Loans.