As a business owner, your credit is everything. More than your bottom line, your customer loyalty and even your cash flow, your credit is basically what will part the sea and allow you to run your business with freedom and liquidity. You can think of credit for business as an escape hatch, a safety net and a floatation device. This is precisely why you want to learn how to build and maintain good business credit. Indeed, your credit score will tell creditors that you are good for the money they will open up to you, and it will let loan officers know that you are good for the repayments. Moreover, your credit score will let wholesalers and suppliers know that you can pay back a certain purchase order within a certain amount of time. Here is how to establish and maintain good business credit.
- Start with examining your credit score – you want to make sure that you know what your score is and you want to know why it is so low. If you don’t have any credit, your score may be low because there is no history. However, your score may also be low because of poor financial decisions. You can usually visit Credit Sesame to examine your score and your report.
- If you have bad credit, you want to start paying off all your debts – if you don’t, you will wind up further and further in debt. Moreover, you will wind up with a lower and lower credit score. In order to start paying off your debts, you want to contact all the organizations you owe money to and you want to come to some kind of agreement.
- Speak with a financial advisor – a reputable financial adviser will be able to help you manage your finances so that it is easier to stay on top of debts. When it comes down to it, a financial adviser is a smart investment if you are trying to organize your fiscal affairs. A financial advisor will know exactly where you should put your money so that it accrues interest and doesn’t just sit there.
- If you don’t have any credit, you will want to build credit – you can start by taking out a credit card. If you have good personal credit, getting approved for a credit card won’t be a problem. If you have bad personal credit, you will need to take measures to boost your score – or else it will be difficult to for a bank to approve a credit card.
- Make sure that you pay off all debts and that you make payments well before the due date – if you go over, your credit may be in danger. When it comes down to it, the best way to maintain your credit is to have a schedule of when payments need to be made. You may even want to make automatic payments – this can be done with credit card payments and bills. In the end, automatic payments also make the process easier.