Why is it important for a business to have a good credit score?
If you think of companies’ like Google, Face book or Apple, they do not only rely on their own money for their growth. Even if today there is plenty of cash inflow as well as in your bank account, there will be a day when every business needs some extra money to deal with some unexpected changes in business. A business score is same as the personal score. This needs to be maintained and kept up if you really want your business to expand in the near future. By following a few simple steps, any business can maintain their credit. Let us have a look at some of the basic and important tips to follow.
Just like the personal credit score, even a business credit score can have a dip if there are any missing payments. Always make sure to pay your bills on time like payments for credit card or mortgage etc. If your record reflects many missing payments or credit lending, then your business score is at a risk.
Never apply for more than one credit card at once. Every time a credit card is applied, the procedure has the lenders to check the credit report and they will leave a mark for the other lenders or bank to see. If there are a number of marks on the credit report of your business, the lenders might think that you are struggling financially and this can be a risk again. If you apply for another credit card in such a situation, then you have very low chances of approval.
The lenders would come forward to lend you the money, if you can assure them about the financial stability of your firm. This can also be proved with the credit report as well. Planning in advance for such situations is quite helpful. Reduce the time for payments for your customers and check with your suppliers if you can get an extended time for the payment of invoices. Such small extensions will help you to plan out a bit.
Every business is in need of dependable supplies. No business is good without good suppliers. Make sure that the suppliers you deal with are reliable as a late delivery from their end can lead to your business losing important customers. It is always good to make some research before going in for a deal with the suppliers.
Very similar to having good suppliers, it is also important to avoid risky customers. Screen your customers the way you screen your suppliers. A bad customer can ruin the reputation of your business. This needs to be done in a subtle way in order to prevent any negative feedback which might occur.
Any kind of errors or mistakes need to be reported to the credit bureau immediately. Any business is entitled to receive 3 free credit reports. Hence it is always good to check the report regularly and let the agency know before it affects your business credit score.