It is a matter of fact that you can’t think of a new start-up without thinking about the costs and expenses first. The equipment, advertising, payrolls, inventory, and all these expenses cannot always be paid in cash. Here is precisely where a good credit score becomes vital.
If you want to apply for financing to afford necessary expenses, you’ll need a decent business credit score. When reviewing your loan or consumer credit application, most lenders will consider your credit score. Therefore, you should consider improving or maintaining your score.
But what is considered a good credit score? Different credit bureaus have their scoring models, but most business credit scores range from 0 to 100.
Start thinking about it more seriously if you are starting your business and haven’t established good credit yet. Below are listed some of the main reasons:
- It will be easier to qualify for a loan – This is the most significant benefit of having good business credit. Lenders usually hesitate to lend money to businesses with a poor credit history because they fear you won’t be consistent with the payments.
- Better loan terms – lenders offer favorable credit terms to those who have proved their creditworthiness. Better terms mean more benefits and more benefits mean fewer costs.
- It protects your personal finances – With business credit, you can separate your personal and business financial obligations. This way, your business debts will be reported on your small business’s credit reports, saving your personal credit rating from being impacted by them.
Now that you understand the importance of maintaining a good business credit score, it is the right time to start taking action. It doesn’t matter if it is a new business or a well-established operation. It’s always crucial to build a credit score that will help you achieve business success for years to come.
Here at TruFinCo, we believe that a bad credit history doesn’t have to ruin your future! We will help you make the best of the situation you’re in while creating a plan to help you recover.