Do you own a business? Or maybe you want to start one? Getting money to grow your business is very important. You might need a loan to buy a new machine, to hire more people, or to open a second store. But getting that loan can be hard.

The big secret is that the bank looks at your credit. Not just your business credit, but your personal credit too. Many business owners make a big mistake here. It is a mistake that can cost them a lot of money—maybe even over $100,000.

This is not just about keeping good records. It's about a simple idea that can help your business get a lot bigger. At Tekkadan Financial Solutions, we help people and businesses with money. Today, we will show you this big mistake and how to fix it.

Think of your credit score like a report card for how you handle money. It is a number that tells banks if you are a good person to lend money to.

• A good score (like an "A" on a report card) tells banks that you pay your bills on time. This makes them happy to lend you money.
• A bad score (like a "D" or "F") tells them you might not pay them back. This makes them not want to give you a loan.

Your business also has its own credit report card. Banks look at both your personal report card and your business one.

The Big Mistake That Costs $100,000

Many business owners think their personal credit does not matter for their business. This is a big mistake. For most small businesses, the bank looks at your personal credit first.

Here are some facts that show how important this is:

• Over 80% of small business loans are approved based on the owner's personal credit score.
• If your personal score is high, you have a much better chance of getting a loan. It makes you look like a safer bet.
• Getting a better interest rate on a loan can save you a ton of money. A small difference in the interest rate can add up to tens of thousands of dollars over time.

This mistake is not just about getting a loan. It's about getting a good loan. A better score means you get a lower interest rate. A lower rate means you pay less money back over time. That extra money stays in your pocket and can be used to grow your business.

The Problem Has Two Parts

The big mistake is a mix of two smaller mistakes:

1. You do not take care of your personal credit. You might think, "My personal score is fine," and then ignore it. But it might not be good enough for a business loan.
2. You do not build your business credit. You do not work to make your business have its own good credit report. You rely on your personal one too much.

When you do both of these things, you have a weak credit profile. And a weak credit profile costs you money.

How to Fix This and Save Your Future

The good news is that you can fix this. You can start today to build a strong credit foundation for both yourself and your business.

Part 1: Make Your Personal Credit Strong

• Check your report card. Get your free credit report once a year. Look at it to make sure everything is right.
• Pay bills on time. This is the most important thing you can do. A late payment is a big red mark on your report.
• Use credit wisely. Try to only use a little bit of the credit you have on your cards. Using less than 30% of your credit limit is a great goal.

Part 2: Build Your Business's Credit

• Get an EIN. This is like a Social Security number for your business. It is free from the government.
• Open a business bank account. Do not mix your business money with your personal money. This is a very big step.
• Get a business credit card. Use it for business costs and pay the bill on time. This helps your business create its own credit history.
• Work with vendors who report to credit bureaus. Ask your suppliers if they will report your on-time payments.

When you do these things, you show banks that both you and your business are good at managing money. This can save you a lot of money and help your business grow big and strong.