The short answer: yes.
The long answer: Like most things financial, the answer is complicated. 
We’ll clarify when small business loans impact your personal credit score, and how to use this information to your benefit.

Especially if you are the primary owner of the business getting a small business loan or have signed a personal guarantee for the loan, a business loan can affect your personal credit score.

When you apply for a business loan, the lender may check your personal credit score to evaluate your creditworthiness. This is because your personal credit history is often seen as an indication of your ability to manage credit and pay bills on time.

If you are approved for a loan, the lender will report the loan to credit bureaus, which will then include the loan on your personal credit report. If you make timely payments on the loan, it can have a positive impact on your personal credit score.

On the other hand, if you miss payments or default on the loan, it can negatively impact your personal credit score, which can make it more difficult for you to qualify for loans or credit in the future.

It’s also worth noting that some lenders may report small business bank loans to both personal and business credit bureaus, so it’s important to keep up with payments on both your personal and business loans to maintain good credit scores in both areas.

Besides for protecting yourself from personal liability, building business credit apart from personal credit is a powerful tool for:
– Negotiating government contracts
– Obtaining a line-of-credit increase
– Requesting lower premiums on insurance policies
– Applying for emergency funds 

But, even when you keep your business and personal expenses separate, your business and personal credit will influence each other in these circumstances: 
1. If your business loan is personally guaranteed, you’re legally liable for the loan repayment. 
2. If you use personal credit like a home equity line to fund your business. (Loans against retirement plans, don’t show up on consumer credit reports).
3. If a lender checks your personal credit report for a business loan. (This is usually a short-term negative effect due to hard pulls that affect your score).
4. If your lender reports the business activity to personal credit agencies.  

Use these situations to your benefit and positively impact your business and personal credit at the same time. 

Here are 2 ways a business loan will bolster your personal credit score:
1. By processing the loan payments on time you prove your business’s creditworthiness.
2. With more available credit you can have a lower credit utilization ratio which increases your score. 

Your credit score is mainly determined by the length of credit, credit utilization, and payment history. 
Therefore, yes, if you pay your business loan on time and if you use less than 30% of your available credit, you can have a positive impact on both your personal and business credit scores. 

Equire helps you find the best business financing option even if you have issues with your personal or business credit score. Find the bank loan for business loan that works for you – one that can help you build your credit – by calling Equire. We’ll be glad to assist with all your small business finance needs.

How should you buy and finance equipment for your new business? Read more about equipment financing.