Although an impressive credit history and high credit scores aren’t required to start a business, they sure help. After all, you may soon want to borrow funds from a financial institution so you can pay for the costs of a launch, manage ongoing operations and more.

To appeal to a lender, your past credit history will be relevant. Since your business has yet to start, you won’t have a business credit profile that can help you qualify for credit products. Therefore, lenders will assess your personal creditworthiness to determine qualifications and set terms.

Thankfully, you can overcome the problems associated with bad credit to qualify for a business credit card — and a business loan, since that might be necessary, too.

Build up your personal credit score

To know what is dragging your credit scores down, pull your credit reports up. You can get a report from each of the three credit reporting agencies — Experian, TransUnion and Equifax — once a year for free from

The information listed in the sections for trade lines, public records and credit inquiries of your credit report is all inputted into scoring models, so read your reports carefully. If you spot any inaccuracies, file a dispute with one of the credit reporting agencies. The one you use will notify the other two, and your files will be updated.

To improve your credit score (even when the negative data is still being listed), be sure to:

  • Pay all credit accounts on time. Although late payments hurt credit scores (especially when there are many or accounts are seriously delinquent), establishing a perfect payment history from this point forward will help mend the damage.
  • Reduce credit card debt. If you have credit cards and they’re maxed out, reduce the balance to well below the credit limit.
  • Consider opening a credit card. Consider opening a personal credit card. There are many credit cards for people with bad credit. Once you have a card, choose a small bill to charge each month, then pay it off in full and on time.
  • Add utility and cellphone accounts to your report. The more on-time payments you have on your credit report, the better. Experian has a free Boost program where you can add non-credit accounts to your file. Those payments should help give your FICO 8 credit score at least a few extra points.

With this strategy, you can build your credit over time. For the best approval odds, you’ll want to aim for a credit score of 700 or higher, or a credit score at least in the good range. As a reference, here’s a breakdown of the FICO scoring ranges:

  • Excellent: 800-850
  • Very good: 740-799
  • Good: 670-739
  • Fair: 580-669
  • Poor: 300-579

Find a business credit card you can qualify for

Although you can use a personal credit card for your business, it’s better to get one specifically for your company. They offer benefits that are designed to help business owners do everything from accounting to expense management. Just be aware that business cards remain your personal responsibility. Even if it’s in your business’s name, you will be on the hook for all payments and any outstanding debt.

Even if your credit is bad, there are still some good business cards for people with bad credit to consider. But if you’re able to build your score to at least the good credit range, you can then start looking into the best business credit card options. As you’ll see, there are many, so give this task plenty of time. Just make sure you meet a business card’s requirements before submitting an application.

Be aware that some business cards are charge cards while others are credit cards. With a charge card, there is no preset credit limit and you’ll need to pay the entire balance within about 30 days. With a credit card, there is a maximum amount you can charge, but you can pay at least the minimum requested payment and then revolve the rest. Ultimately, you may want one of each.

Additionally, almost all business cards have rewards programs attached to them, so read over a program’s details and focus on those you’ll use. Rewards programs differ, too, so make sure it’s a good match for your business. One card may offer an exceptional rewards value for restaurant meals, while another offers boosted rewards on office products. Or, if you think traveling will be in your future, concentrate on a business card that gives you travel perks related to flights, airport amenities, hotels and car rentals.

It’s also worth noting that many business credit cards offer excellent sign-up bonuses, too, which will allow you to earn a large amount of points, cash or miles after spending a certain amount within a specific timeframe after card activation.

Some business cards also offer 0 percent APRs for a fixed number of months, which will give you a nice amount of time to pay for your venture’s needs before financing fees are assessed. As long as you pay the debt in full before the real APR begins, you’ll essentially get a free loan.

Finally, prepare for annual fees. Not all cards charge them, but if you can get enough perks and rewards out of an account, you’ll come out ahead.

Need more business financing? Look into loans

Credit and charge cards tend to be great for short-term financing, while business loans are preferable for big-ticket expenses that you want to pay off over several years.

To get a business loan with the best terms, it’s best to wait until your credit is in decent shape. However, if you must borrow a significant amount of money right away and then pay in equal installment payments, there are startup business loans available for bad credit.

Loans with no credit checks still pass through an approval process, but the lender analyzes your assets and income for approval instead of your credit history. If it appears that you can make the payments that are associated with the loan, it should be approved. Other lenders do check credit reports and scores, but the standards for qualification are low.

In either case, loans that are developed for people with bad credit tend to be smaller and come with higher interest rates than those for people who have good credit.

Whichever loan you get, simply pay it off according to the agreement. Assuming the lender sends information to the credit reporting agencies (most do, but if you get a “no credit check loan,” ask the lender to be sure), it will help your credit score rise.

The bottom line

To qualify for a business credit card (and a business loan), take action to improve your personal credit history. Shape up your FICO score, identify the right business card for your needs and consider a business loan. Take these simple steps and you’ll not only repair your bad credit, but you’ll then be able to apply for better credit products for your business.