Back
The Entrepreneur's Credit: Why Your Personal Score Matters
In India, for most early-stage startups, the founder's personal CIBIL score is the primary filter used by lenders for business loans or corporate credit cards. Even though your business is a separate legal entity, your personal credit history reflects your financial discipline. A low score can lead to loan rejections or higher interest rates, which can stifle your company's growth.
Keep Personal and Business Finances Separate
A common mistake among founders is using personal credit cards for business expenses. This often leads to high credit utilization, which drags down your personal CIBIL score. Always aim to get a business credit card or a dedicated startup credit line once your company gains traction. This protects your personal credit profile from the volatile spending patterns of a startup.
Automate Your Life
Founders are incredibly busy, and missing an EMI due to forgetfulness is a risk. Always set up SI (Standing Instructions) for your personal loans and credit cards. A single 30-day delay can drop your score significantly, exactly at the moment you might be applying for a crucial bridge loan for your business.
