How does one's personal credit history affect one's own company's credit rating?
"For a newly registered business, you'll be using your ""personal"" credit score to get the credit.  You will need to sign for the credit card personally so that if your business goes under, they still get paid. Your idea of opening a business card to increase your credit score is not a sound one. Business plastic might not show up on   your personal credit history. While   some issuers report business accounts   on a consumer's personal credit   history, others don't. This cuts both ways. Some   entrepreneurs want business cards on   their personal reports, believing   those nice high limits and good   payment histories will boost their   scores. Other small business owners,   especially those who keep high running   balances, know that including that   credit line could potentially lower   their personal credit scores even if   they pay off the cards in full every   month. There is one instance in which the   card will show up on your personal   credit history: if you go into   default. You're not entitled to a   positive mark, ""but if you get a   negative mark, it will go on your   personal report,"" Frank says. And some further information related to evaluating a business for a credit card: If an issuer is evaluating you for a   business card, the company should be   asking about your business, says   Frank. In addition, there ""should be   something on the application that   indicates it's for business use,"" he   says. Bottom line: If it's a business   card, expect that the issuer will want   at least some information pertaining   to your business. There is additional underwriting for   small business cards, says Alfonso. In   addition to personal salary and credit   scores, business owners ""can share   financials with us, and we evaluate   the entire business financial   background in order to give them   larger lines,"" she says. Anticipate that the issuer will check   your personal credit, too. ""The vast   majority of business cards are based   on a personal credit score,"" says   Frank. In addition, many issuers ask   entrepreneurs to personally guarantee   the accounts. That means even if the   businesses go bust, the owners promise   to repay the debts. Source"
FICO score tracks credit, not checking or savings. Unless there was a credit line attached, no impact at all. No.  I have several that I haven't used in a year or so (legacy of the time when they gave you money to sign up :-)), and credit rating's something over 800 last I checked. Banks calculate the total they can present to you chiefly on your net review earnings. They get into explanation their preceding experience and your present track record which would point to whether you have taken any other loan or you have had a awful credit history and effects like your investments history and your existing investments before making a choice as to how much they will lend to you. Absolutely nothing will happen. These credit history companies have no scruples and no reason to give a damn about consumers. Every recourse you have to fix inaccuracies in your credit history were won with legislation or litigation.  They don't care about you. "Credit Unions have long advocated their services based on the fact that they consider your ""character.""  Unfortunately, they are then at a loss to explain how they determine the value of your character, other than to say that you're buddies & play pool together so they'll give you a loan. Your Credit History / Score is as accurate a representation of your character in business dealings as can be meaningfully quantified.  It tracks your ability to effectively use and manage debt, and your propensity to pay it back responsibly or default on obligations.  While it isn't perfect, it is certainly one of the best means currently available for determining someone's trustworthiness when it comes to financial matters." I feel the change should not be to remove the stigma from personal default. It should be to add it, in very large amounts, to corporate default. Every member of a defaulting corporation should be ashamed to be seen in public. The have let their culture down and should be mortified.  So if you defaulted on your mortgage, yeah, that's not great. If you're Donald Trump, that filed 11 a couple times, he can go fuck himself. "Hard pulls you give your explicit permission to run do affect your credit.  Soft pulls do not. While hard pulls affect your score, they don't affect it much.  Maybe a couple few point for a little while.  In your daily activities, it is inconsequential.  If you are prepping to get a mortgage, you should be mindful. Similar type hard pulls in a certain time window will only count once, because it is assume you are shopping.  For example, mortgage shopping will result in a lot of hard pulls, but if they are all done in a fortnight, they only count against once.  (I believe the time window is actually a month, but I have always had two weeks in my head as the safe window.) The reason soft pulls don't matter is because businesses typically won't make credit decisions based on them.  A soft pull is so a business can find a list of people to make offers to, but that doesn't mean they ACTUALLY qualify.  Only the information in a hard pull will tell them that.  I don't know, but I suspect it is more along the lines of ""give me everybody who is between 600 and 800 and lives in zip code 12344"" not ""what is series0ne's credit score?"" A hard pull will lower your score because of a scenario where you open up many many lines of credit in a short period of time.  The credit scoring models assume (I am guessing) that you are going to implode.  You are either attempting to cover obligations you can't handle, or you are about to create a bunch of obligations you can't handle. Credit should be used as a convenient method of payment, not a source of wealth.  As such, each credit line you open in a short time lowers the score.  You are disincentivized to continue opening lines, and lenders at the end of your credit line opening spree will see you as riskier than the first." The biggest issue with personal bankruptcy is the guilt.  We generally are brought up to believe that we should be responsible for our debts.  Bankruptcy is a direct contradiction to that concept.  Once a debtor realizes that corporations don't necessarily view bankruptcy as failure, but merely a financial tool, that makes it a lot easier to let go of the guilt.  Once that happens, all a debtor needs to get used to is the idea that s/he'll be dealing with a cash economy for a while.  Which isn't a particularly bad thing at all.  Inconvenient at times, but that's about it. Owning a stock via a fund and selling it short simultaneously should have the same net financial effect as not owning the stock.  This should work both for your personal finances as well as the impact of (not) owning the shares has on the stock's price. To use an extreme example, suppose there are 4 million outstanding shares of Evil Oil Company.  Suppose a group of concerned index fund investors owns 25% of the stock and sells short the same amount.   They've borrowed someone else's 25% of the company and sold it to a third party.  It should have the same effect as selling their own shares of the company, which they can't otherwise do.  Now when 25% of the company's stock becomes available for purchase at market price, what happens to the stock?  It falls, of course.   Regarding how it affects your own finances, suppose the stock price rises and the investors have to return the shares to the lender.  They buy 1 million shares at market price, pushing the stock price up, give them back, and then sell another million shares short, subsequently pushing the stock price back down. If enough people do this to effect the share price of a stock or asset class, the managers at the companies might be forced into behaving in a way that satisfies the investors.  In your case, perhaps the company could issue a press release and fire the employee that tried to extort money from your wife's estate in order to win your investment business back.  Okay, well maybe that's a stretch. In finance you are taught that debt financing is cheaper than equity financing.  Also to improve your credit rating, showing that you can carry debt responsibly and pay it off without a hitch sends dog whistle that the corporation is operating well. "I can't think of any conceivable circumstance in which the banker's advice would be true. (edit: Actually, yes I can, but things haven't worked that way since 1899 so his information is a little stale. Credit bureaus got their start by only reporting information about bad debtors.) The bureaus only store on your file what gets reported to them by the institution who extended you the credit. This reporting tends to happen at 30, 60 or 90-day intervals, depending on the contract the bureau has with that institution. All credit accounts are ""real"" from the day you open them. I suspect the banker might be under the misguided impression the account doesn't show up on your report (become ""real"") until you miss a payment, which forces the institution to report it, but this is incorrect-- the institution won't report it until the 30-day mark at the earliest, whether or not you miss a payment or pay it in full. The cynic in me suspects this banker might give customers such advice to sabotage their credit so he can sell them higher-interest loans. UDAAP laws were created for a reason." Apart from the reasons currently given (which have to do with personal relations), wouldn't a good reason to take the loan from the bank be to build up a credit history and/or improve your credit score? The biggest issue with personal bankruptcy is that your credit rating determines a lot more than whether someone will lend you money. In particular, someone with bad credit will find it *extremely* difficult to rent a house or apartment, something that will be of utmost importance if you've just turned in your home as collateral. In case you didn't see over the past few years, especially in banks, falling stock prices often lead to ratings downgrades. The logic is that a bank who's stock price is low, or falling, is suffering from a decrease in their ability to tap the equity markets in times of need.  With less ability to tap the equity markets in times of need, this means it is less likely the bank can raise funds to pay off debt, and thus, makes their debt more risky.   It's unfair for me to imply a 100% causal relationship here, because that's not the case, but each of the markets interact with each other in some way. You will at least notice that, whether leading or trailing, companies that have a decreasing stock price also often have a decreasing credit rating.  You'll also notice that stocks which slip under $5 often times get put on credit watch.   The logic could go any which way around the circle, but a company that cuts its dividend may lose some investors who were in it for the dividend. This can cause stock price to fall. Credit agencies, depending on the situation, may approve of companies that cut their dividend (more cash to pay off debt), or, may indicate the dividend cut is not enough to make up for the company's falling profits.   In the absence of full information, a cut in the dividend is often seen as a sign of weakness or a sign of tough times for the company in the future. Companies which have changes in dividend are looked at as less stable, more unpredictable, blah blah blah.   Again, I'm not implying a 100% causal relationship here, but, each of these markets work with each other somehow, and a bank which cuts its dividend may be expecting lower profitability, slower growth, need the funds to cover lawsuit payouts or settlements with insert-regulatory-agency, or any number of other situations. The answer to your question is governed by the structure of the company and your ownership or lack thereof in the business.  Australian business can be structured the same way U.S. ones are, as a sole proprietorship, partnership, LLC, or company.  If you are only on the board and have no equity, you cannot be affected.  You must have some amount of equity in the business to have any chance of being affected. If the business is a sole proprietorship, then the single individual running the business is personally responsible for all debt and the inability to pay obligations would result in personal bankruptcy which would in all likelihood affect your credit score (it would in the U.S.). If it is a partnership, then anyone holding stock in the company is likewise personally responsible for a portion of the debt, and can be subject to bankruptcy and credit score implications. If the business is structured as a limited liability company or a corporation, a stakeholder's personal finances are separate from the business's and their credit score cannot be affected.