You want to be an entrepreneur, but to start a business, you're going to need money. The first line of defense here is to draw upon your own capital, or hit up your friends and family for some cash to get you going. But unless you and your family members have already experienced some significant success, that's not going to be enough to get your business off the ground. Instead, you'll need to rely on loans or grants to get the capital you need.

To make matters even more difficult, you'll probably need to borrow money throughout the course of your business ownership, or at least set up a line of business credit that you can draw on to keep your cash flow positive and moving. But you can't do any of this until your own personal finances--including your personal credit--are in order.

Why Credit Is Important

Why does credit matter for entrepreneurs? Well, to secure a loan, apply for a standing line of credit, or even make a good impression to prospective investors, you need to prove that you're financially responsible. Banks, lenders, and investors will all look at your credit history and your credit score to see evidence of your financial responsibility.

As Experian explains, your overall "credit" or credit score is based on a number of factors, including how much standing debt you have, how many lines of credit you have open, how long you've had your accounts, and whether you've missed any payments. Fortunately, if your credit isn't in good shape, or if you haven't built the credit you need to start a business, you can work to bring it back to good health.

See Where You Stand

According to Credit Sesame, the first thing you need to do is check out your credit score to see where you stand. If you're in good standing, there's not much you need to do (other than maintain your current good habits). If you have room for improvement, you'll need to know which areas of improvement you need to focus on. For example, do you have too much standing debt? Have you missed too many payments? Your credit report, which you can get for free, will be able to guide you in the right direction.

Put Out Your Financial Fires

After that, you'll want to put out any financial "fires" you might have. Focus on avoiding the creation of new debt, and pay down your biggest debts to more reasonable figures. Consider closing out accounts that you don't use, and prepare a standing budget so you don't run into any future issues with payments or accumulation of debt. You'll also want to create an emergency fund for the same reason--until you're in good personal financial standing, it's not a good idea to start a business.

Commit to On-Time Payments

Put a plan in place to ensure that all your payments--including your mortgage, your car payments, your bills, and your credit card payments--are met on time. Even one missed payment can hurt your credit score, and that can prove to be a huge step backward when you're trying to rebuild your credit to optimal health. Only buy things you need, and set reminders in any medium you choose to ensure all your payments are going out on time.

Avoid New Accounts

Any time you open up a new account, you risk taking a small hit to your credit score. You also open yourself up to new accumulation of debt, which isn't good, and you bring your average account history down as well. Focus on using and making progress with any credit accounts you currently have open, and avoid any new openings.

Raise Funds

If you're unable to build credit quickly enough, the last thing to try is raising all the funds you need immediately, from scratch. After all, you won't need to apply for a loan if you have the capital necessary to cover all your upfront expenses. This can be extraordinarily difficult, but if you choose a low-cost business model and find the right investors, it's definitely a possibility.

The biggest factor for credit is time--which makes it incredibly hard to build new credit or repair a damaged credit score. Depending on your current credit, it could take months or years to get back in good condition. Still, with determination and fiscal responsibility, you should be able to climb out of any financial situation and start your business with full momentum. ​