Creating a robust credit history for your small business can make the difference in securing funds for growth, surviving tough economic times, and getting the best terms and rates from suppliers. There are few activities as important to the success or failure of your business as a healthy credit score.
How to Build Your Credit Score
Establish it – One mistake many small business owners make is to use their personal credit for the business. Credit should be in the businesses name, and this includes lines of credit, credit cards, and services such as utilities. Building a credit history should begin from the first day you open the doors.
Score it – Improving your rating is the next step. This is primarily accomplished by paying your bills on time every time, not some of the time or some of the bills. Don’t overextend yourself to the point that you have to decide who to pay and who can wait. Late payment will adversely affect your score.
Track it – Monitor Dunn & Bradstreet. Credit scores can fall considerably in as short of time as three months. Don’t only track your business but also vendors and customers. Tracking interested parties may help you avoid credit mistakes.
Why You Should Build Your Credit Score
Focusing on creating a positive credit score will impact your business in multiple ways. Some potential customers vet credit scores before considering using a provider. A high score can translate into better terms from vendors. A good score may secure larger lines of credit at lower rates. A consistently well-performing score may qualify you for loans in the worst of times when others don’t qualify. A positive business credit score can mean survival or failure of your business. If you’d like to learn more I suggest the following: