Faced with rising defaults, some banks may add small-business-loan payment history to a borrower’s consumer-credit file.

The US Small Business Administration requires borrowers to personally guarantee loans. Fair enough -- especially during good times. But professional debts may become personal during the recession.

Troubled business loans could hammer the personal credit score of some entrepreneurs --driving up the cost of existing credit and future loans, or limiting prospects for a mortgage on a new house.

Business Week reports that Capital One (COF) plans to report business loans to the major consumer credit bureaus, including Equifax (EFX), starting next month. The bank has reported small-business loans to the Small Business Financial Exchange, a business credit bureau, since 2007.

Here’s what small-business owners facing a cash crunch need to do:

1. Review the terms of your loan: Determine your bank’s current practice regarding business loans and credit reporting. Ask if it will change in the future.

2. Keep it simple: Remember that your personal or business credit rating won’t be hurt if you’re current on payments. Genius, eh? But many borrowers overlook this basic point.

3. Don’t panic: Most lenders still don’t report business loans to the consumer credit bureaus unless the borrower is delinquent, says the credit-scoring company FICO (FIC).

4. If you’re headed for trouble: Call your bank, alert your loan officer to the impending problem, and make every effort to stay current with your payments. Banks are feeling the squeeze too, and most will work with you to avert default -- especially if you’ve been a good customer for years. You may be able to extend payments, but you may pay a higher interest rate.

5. Put it in writing: Send letters detailing your financial situation to your bank. State what you're doing to keep the loan current, and re-state for the record any changes in terms you and your bank have agreed to. Build a record and keep a file.

6. Avoid bankruptcy, if possible: Though bankruptcy allows businesses or individuals to reorganize their finances, some abuse personal bankruptcy by using it as a convenient way to avoid paying some of their debt, giving the process its stigma.

7. Bankruptcy isn’t the end of the world: If you file for bankruptcy, you'll get credit again, but it’s likely to be from sub-prime lenders at high rates. In any case, personal bankruptcy means you’ll spend years rebuilding your credit score.

8. If you’re married: Both spouses may not have to file for bankruptcy. It’s common for one spouse to have significant debt in his or her name only. But if both partners are liable for the debt, they should file together.

9. Get an attorney: You can file the paperwork yourself, but you can easily overlook a minor point that could cause problems in the future. While bankruptcy is routine, it’s wise to consult an experienced attorney if you plan to seek protection from creditors.

10. Avoid this mess: Remember that a strong repayment history is the best way to avoid future credit problems. Here’s betting that the new reporting standards are a not-so-subtle effort to reduce defaults by reminding borrowers of this fact.