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Getting Personal

You want a business loan, but your lender wants to know if you are good for it.

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This story appears in the May 2001 issue of Entrepreneur. Subscribe »

Q: Recently, I was declined for a business loan due to some negative personal issues, though my business bills have always been paid on time. What does my personal credit have to do with the bank's decision?

A: Quite a bit, especially if it's a new relationship. When you apply for a loan, one of the first things most lenders do is pull a copy of your credit report, which shows how you've paid your personal bills. If you've paid your car , and mortgage on a timely basis, the lender may conclude that you'll pay your business bills on time, too. Whether you're incorporated or not, if there's negative information, they may give you a painful answer.

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