As a small business owner, it’s important to make sure you keep your credit score on the right track. From securing funding to working with clients and vendors, your credit score can make a big difference in how your business performs.
Here are just a few reasons a good credit score is a must for your small business:
When your credit score is healthy, it gives both you and your business increased value in the eyes of lenders. Lenders are more willing to give you a small business loan when they see your personal finances are stable.
This is beneficial when you’re just starting your business as well as during different stages of business ownership.
In addition, a solid credit score makes your business more reputable in the eyes of financial investors as well as potential business partners.
Lenders and potential investors aside, having a good credit score will help you run your business with confidence.
When your own finances are in order, it allows you to concentrate on the business at hand. This is a good thing, especially when you’re just starting your business.
As the following article looks at, there are more than just 5 ways your good credit can go bad, which is why maintaining a healthy credit score is so important.
Whether your business has a slow month or there’s an unexpected medical emergency, good credit makes it possible to receive more lending.
Many business owners need more than just one loan during business ownership.
Keeping a stable credit history makes lenders more willing to give you financial assistance throughout the life of your business.
Qualifying for Business Credit
Having a healthy personal credit history is a steppingstone to qualifying for business credit. By building good business credit, your business will no longer have to rely on your personal finances.
Along with protecting your personal finances, business credit also makes your small business eligible for larger credit capacities.
This gives your business the ability to grow and take on new opportunities and business ventures.
Tips for Keeping Good Credit
Whether you’ve established credit for your business or you’re financing your business with your personal credit, it’s important maintain a healthy credit score. As mentioned before, good credit gives your business increased value and a solid reputation.
When it comes to healthy credit, there are a number of things you can do to stay on track.
- Pay Bills on Time – From credit cards to utilities, paying all of your personal and business bills on time will keep your credit score high.
- Check Your Credit Score – By checking your credit score regularly, you’ll be aware of any changes that take place. If your score drops significantly, your credit report will give you a financial outline of where you went wrong.
- Monitor Vendor and Customer Credit Scores – If you extend lines of credit to vendors or customers, make sure you check their credit scores as well. Bad credit is a good sign your clients won’t follow through with financial obligations, which could ultimately affect your score.
Before you to take the small business world by storm, first make sure your credit is in good standing.
About the Author: Adam Groff is a freelance writer and creator of content. He writes on a variety of topics including small business and budgeting.