NCET

The third sentence in the letter Gary Kerr received earlier this month about his $50,000 loan from Capital One surprised him: “We’ll begin reporting your loan status to business and consumer credit bureaus from July 15, 2009.” In more than 20 years as an entrepreneur, Kerr says business loans had never affected his personal credit score.

Small business borrowing is generally not reported on owners’ consumer credit reports unless they fail to pay on time. But with banks facing rising defaults, at least one lender is moving to add small business loans to borrowers’ consumer credit files, meaning small business owners could soon find that their business debts are affecting their personal credit. Any debt that owners personally guarantee—including many business loans and credit cards—could be reported. Read more:

Technorati Tags: BusinessWeek, John Tozzi, Gary Kerr, Small Business Administration, Steve Schooff, Capital One, Small Business Financial Exchange, Tim Klein, Equifax, Sharon O’Connor Clarke, FICO, Fair Isaac Corp., NCET, Nevada’s Center for Entrepreneurship and Technology

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