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Many of our clients come to us with very poor credit scores. This is a symptom of the small business owner leveraging everything they can to keep the operation running, including their personal credit.
While it is important to note that in the vast majority of SBA workouts personal credit is not impacted, our clients are typically dealing with a variety of personally guaranteed debts all at once—such as business and personal credit cards, commercial lines of credit and leases.
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When the dust settles post-restructuring, it’s entirely likely that you will need to work on rebuilding your credit score. A good credit score offers multiple benefits, including increased credit limits, competitive financing rates and greater negotiating power when securing a loan.
And today, your credit score is influenced by more factors than ever. New scoring models, such as FICO 10T and VantageScore 4.0 (both approved for mortgage underwriting), and the brand-new VantageScore 5.0, place greater weight on long-term payment behaviors. Even Buy Now, Pay Later (BNPL) loans will soon begin appearing on credit reports, meaning that on-time installment payments can help you, while missed ones will hurt.
So what can you do to improve your credit score in this new landscape? Here are three tried-and-true strategies, plus a few timely updates to keep in mind.
Secured Credit Card
A secured credit card is almost guaranteed to be approved by a lending institution, as you reduce their risk by providing a cash deposit (typically around $500). The credit limits of secured cards are set by the amount you deposit, so you can’t run up more debt than what you’ve pledged as collateral.
By using the card like a standard credit card, putting small purchases on it, and paying them off on time, you build a positive revolving credit history. This signals to lenders that you are creditworthy. Credit unions are a great place to start, as they typically report your activity to all three credit bureaus.
After several months of responsible use, many banks will reward you by increasing your credit limit without requiring more collateral. That higher limit helps lower your credit utilization ratio (the percentage of available credit you’re using), which is one of the biggest factors in all new scoring models.
Obtaining a secured credit card remains the best first step in successfully rebuilding personal credit.
Goodwill Adjustments
Goodwill adjustments are a little-known trick that can have a potent impact on your score.
For example, imagine you prioritized payroll during a tough season and fell 30 days late on a business credit card. That late mark can remain on your report for up to seven years. However, if the account is now current or settled, you can write a goodwill adjustment letter to the creditor asking them to remove the late payment from your credit history.
When writing your letter:
- Acknowledge your actions. Own the missed payment and explain your circumstances honestly.
- Be polite. Appeal to the human being reviewing your case.
- Emphasize the good. Point out your recent positive payment history as evidence that the late payment was an exception.
Follow up politely and persistently. Goodwill adjustments aren’t guaranteed, but they can be effective in improving your score.
Piggybacking
“Piggybacking” means being added as an Authorized User on someone else’s account in good standing.
For instance, if your spouse has a 750 credit score and a long-standing credit card with a perfect payment history, being added as an Authorized User instantly imports that payment history to your own report. This can provide a significant boost.
However, it cuts both ways: if the primary cardholder misses payments, those defaults will also appear on your report. And if you misuse the card, it affects them. This strategy is best reserved for trusted family members and should be treated with respect.
Additional 2025 Considerations
Beyond these three core strategies, keep in mind:
- BNPL accounts (like Affirm, Klarna, Afterpay) are beginning to affect credit scores. Pay them on time or avoid them altogether if you’re rebuilding.
- Delinquencies are rising nationwide, even among prime borrowers. That means lenders are scrutinizing new credit applications more carefully, so focus on strengthening your profile before applying for larger loans.
- Credit utilization is still king. Strive to keep your balances below 30% of your available credit—ideally under 10%—for the best results across FICO and VantageScore models.
Final Thoughts
Rebuilding credit is a process—but with today’s updated rules and scoring models, there are new opportunities to accelerate your progress. Combine the proven strategies of secured cards, goodwill adjustments and piggybacking with awareness of BNPL reporting, medical debt changes and utilization ratios.
Above all: stay persistent, be polite when dealing with creditors and be patient. With consistent effort, your credit score can—and will—rebound.
