As the adage goes, “Don’t combine business and pleasure.” Perhaps it can be revised to a warning against mixing business and personal matters. While a certain connection between your personal and business life is unavoidable—banks might take your personal credit score into account when deciding whether to lend to your business—there are advantages to keeping them separate. For instance, if your business faces headwinds, your savings could be wiped out. In the case of a lawsuit, you might get sued rather than your business. It is essential how to keep these boundaries firm and to understand the difference between your personal credit and business credit score.

Getting Personal

Your personal credit history begins when you are issued a social security number and take your first loan or have a credit card. Credit agencies keep track of how much you owe, if your loans are paid off or if they are delinquent. You can check your personal credit rating by looking at the results of the data compiled but the credit bureaus Experian, Equifax and TransUnion. Your credit score ranges between 300 and 850 with 680 or higher viewed as a solid credit score.

Strictly Business

Your business credit score involves different agencies and numbers, but it is similar. Credit bureaus keep track of your business’ history of loans and repayment and has a record of delinquent loans. Credit bureaus for businesses include Equifax Business, Experian Business, Dunn & Bradstreet and Business Credit USA. Your business is given an Employee Identification Number or a Federal Identification number. A business credit score scale is between 0 and 100 and 75 is a strong rating.

Separate Business and Personal Credit

To maintain a healthy and safe separation between your business and personal finances, start a checking account for the business and use it regularly. This will establish a business credit score as a separate entity from you and your transactions. It is also worthwhile to have a distinct checking account and credit cards for your business. This will identify the workings of the business as under the heading of the company rather than in your name.

While your financial health can help boost your business, it is important to establish boundaries between your company and personal finances early in the game. An additional advantage of using your business credit as distinct from personal credit is that it can establish a credit history for your company and make it more likely you can secure a financing in the future.