Falling Into the Poor Credit Hole

More than a quarter of Americans are now seen as a credit risk, and that percentage is likely to grow. That's the result of a new study of credit worthiness released by FICO Inc., a company that helps consumers learn their credit scores and works with businesses on decision management.

According to FICO, 43.4 million people—or 25.5 percent of U.S. consumers—had a credit score of 599 or below as of April. At the upper credit range, the percentage of Americans who had scores of between 750 and the maximum 850 declined from 40 percent before the Great Recession hit to 37.4 percent in April.

Although the report is focused on credit scores as a measure of consumer health, the results send another negative signal for fledgling small businesses. Entrepreneurs often tap into home equity lines to fund a startup, or pull out their wallets and use personal credit cards for their businesses. And as credit card balances grow, credit scores can decline, and obtaining bank financing for loans can decrease.

To get more information on small business lending, explore these options:

SBA—The federal Small Business Administration offers a resource page on its website specifically to help people with lending questions. The SBA has stepped up its lending efforts to help compensate for the difficulty in obtaining financing elsewhere.

bizjournals—For real-world examples of how small business owners secured financing, bizjournals (which like Portfolio.com is owned by American City Business Journals) offers advice and strategies.

CIT—The troubled financial institution remains one of the nation's biggest lenders to small business owners.