Do you have an excellent personal credit score? Are you in the process of starting a business? Are you hoping to expand your current company in the near future?
While running a business can be one of the most enjoyable experiences of your life, it’s also stressful on many fronts. This is particularly true when it comes to managing your company’s finances.
It’s not impossible to start and manage a business with poor credit, but it’s definitely more challenging.
An excellent personal credit score can help you and your business in many ways, including the following:
1. Qualify for the Best Business Credit Card
Maybe you’re interested in a business credit card to streamline and organize your monthly expenses. Or maybe you need it to help get your company off the ground.
Regardless of the reason, there are hundreds upon hundreds of business credit cards to choose from. With excellent credit, you’re more likely to qualify for the majority of these offers. Also, you can take advantage of benefits such as:
- Industry low interest rate
- Robust rewards and cash back program
Even if you’ve never had the need for a business credit card in the past, this may change in the future. An excellent credit score will definitely work in your favor.
2. Qualify for a Business Loan
A loan is one of the best ways to get the money you need to grow your business. For instance, there are small business loans designed for everything from start up costs to expansion.
There are also equipment loans, with the funds designed to help you purchase the equipment you need to succeed.
It’s difficult to qualify for a business loan with a low credit score. Even though it may not be true, lenders will consider you high risk.
3. Negotiate Better Terms with Suppliers
Depending on your industry, you may do a lot of business with suppliers. An excellent credit score will put you in position to negotiate the best possible terms, thus saving you money and taking some stress out of your day-to-day life.
Don’t hesitate to use your excellent credit score to your advantage when negotiating with suppliers.
4. Build a Strong Business Credit Score
There are three credit agencies that produce business credit scores:
- Dun & Bradstreet
Scores range from 0 to 100, with scores of 80 or higher considered good.
Your business credit score is based on multiple factors, such as:
- Payment history
- Credit utilization ratio
- Outstanding debts
- Length of credit history
- Public records
- Industry risk
- Company size
An excellent credit score puts you in position to open accounts, such as a credit card and loan, which will boost your business score (as long as you make on-time payments).
If you currently have an excellent personal credit score, do whatever it takes to maintain it. Conversely, if your score is on the low side, take steps to improve it over the months to come.
An excellent personal credit score will positively impact your business in a number of ways, so make sure you use it to your advantage.