When you go out to get funding for a business that you want to start a lender may choose to view your personal credit report as well as your business credit report. There are several things that may not be present on a business credit report but maybe there on the personal credit report that point towards financial troubles in terms of unpaid debt and other financial burden. It is considered to be quite likely that any financial problem that you are having in your personal life is likely to trickle down to your business as well. For example if you have a short sale listed in your personal credit report, then a lender might view this as severe financial trouble that is likely to filter down to your business management as well.
Studies have been conducted that have established a link between personal credit problems and business financial problems. This is why it is considered to be of critical importance that personal credit be managed just as well by the small business owners.