Even though you may have separate accounts for your home and small business expenses, they can both equally affect your financial health.  Historically credit reporting companies have not reported small business loans on your personal credit history.  However, according to an article by Business Week, that tradition is changing.  It explains that “Small business borrowing is generally not reported on owners’ consumer credit reports unless they fail to pay on time. But with banks facing rising defaults, at least one lender is moving to add small business loans to borrowers’ consumer credit files, meaning small business owners could soon find that their business debts are affecting their personal credit. Any debt that owners personally guarantee—including many business loans and credit cards—could be reported.”  In essence, the national credit crisis is now changing the rules on how personal and business credit accounts are reported.  The result is that you need to take extra care in how you manage your business credit.  Many small business owners work hard to keep expenses separate and avoid comingling of their personal and small business matters.  That is still good advice even under this change in reporting.  However, managing credit when you have a small business credit card may become more challenging, despite recent credit card reform.  The much talked about consumer reform was designed to protect personal credit accounts, not business accounts.  If you have a credit card for your business, your credit card company will still be able to make changes with little or no notice to your regarding your account, like increasing your rate on past purchases.  This could make it more difficult to manage your business credit.

The combination of this new reporting trend and the lack of credit reform for small businesses heightens the need for you to pay extra attention to your business credit and how it could affect your personal credit.  Some people could potentially benefit by the combined reporting practice.  However, some will be negatively affected by changes in their debt to income ratios.  If you were already on the verge of a credit crisis, the combination could just be enough to take your financial health over the edge.  Whenever you seek advice regarding your business debt, be careful to consider the effect it will have on your personal credit status.  A qualified bankruptcy attorney in your area can also help you navigate between the different debt management options available to you and your business.  The rules are changing.  Be prepared. Good advice from a qualified attorney can help your credit crisis from becoming a credit nightmare.