Manage Your Business Credit Score As Capably As the Rest of Your Business
If you run a small business there are 1000 things to take care of everyday. While you focus on generating income, keeping expenses down, managing your employees, and getting that marketing plan in shape, thinking about your business credit rating may get pushed to the back burner.
Ignoring your business’ credit score could turn out to be a fatal mistake. You work hard to maintain a good image to your customers. You should be just as concerned about how your credit report looks to potential lenders and business partners because that is what they are going to look at first. The public does not have access to your personal credit score unless you give somebody permission to see it by applying for a loan or other form of credit. Your business credit score is a different story, however. There may be a potential business partner out there right now, or even a potential buyer for your business, looking at your business credit report and score and making a decision about what they will do next based on what they see.
Setting Up a Plan to Manage Your Credit Card Debt
You can learn how to manage your commercial credit and integrate that activity into your daily routine. Here are some tips to get you started.
1. You must know what is in your business credit report at all times. You must also understand how to read it. Your report will be used by others to make important decisions about your company, like how much money a lender would loan you, how much credit suppliers will extend to you and what interest rates they may charge.
2. Make sure that the business information in your credit report is accurate and up-to-date. Inaccurate and outdated information may create exactly the wrong impression about your business. And it does not have to.
3. Sign up for a monitoring program that alerts you when a change has been made to your credit report. Unexpected changes could mean a fraudulent use of your business credit information. Alerts also include notifications on inquiries gained and new trade lines. You can also protect your business from nonpaying customers, partners and suppliers by checking their business credit report before you do business with them.
4. Separate your personal and business credit lines. When you started out in business personal guarantees and using your personal credit were unavoidable but as you grow larger you can establish purely business credit lines. If you are big enough to do that now then that should be priority number one. This separation can work both ways. If the business runs into trouble you do not want it adversely affecting your personal credit score, and vice versa, you do not want personal credit issues affecting the ability of your business to buy inventory and supplies on good credit terms.
5. Your business credit report is part of the image and reputation of your business. You will help your business grow by taking an active role in managing your credit report and score. Ask your lenders, suppliers, and creditors if they are reporting your good payment history to the credit bureaus. You should also get points for doing things right.