Most people know that it’s important to have a good personal credit score for a number of reasons.
It makes it easier to buy a house, rent a car, and get hired for a job. It also proves you are a reliable person who can handle responsibility.
But have you ever given a second thought to how your small business or company measure up?
If you are like most new business owners, odds are you haven’t.
What Is It? And How is It Measured?
Typically measured on a scale of 1 to 100, most businesses come in around 58, while an 80 or higher is considered optimum.
Basically, just like a personal credit report, it gauges a company’s reliability based on how consistently it pays off its debts. From loans to company credit cards, if you have something to pay off—do it. It’s not worth the risk of tarnishing your reputation or chance at future business.
Important to Check it Twice, Santa Style
To stay on top of and aware of your company’s financial situation, it’s important to apply for and periodically check your credit report.
Experts say twice a year is ideal so you can’t catch any changes or mistakes early on, before they develop into bigger problems.
In this instance, ignorance is most definitely NOT bliss.
It’s better to be as aware as possible than blindly navigating in the dark.
Personal and Professional Go Hand in Hand
While minding your business’s credit score, it’s important to not lose sight of your own.
This is especially important for business owners and leaders. When up for lending or other forms of support, third parties may inquire about the financial condition of not only the company, but also its most influential decision makers.
Poor personal finances are an indicator of poor direction, so why would anyone invest in a company led by someone who can’t stay out of debt themselves.
Return on investment is a huge determining factor when an outside company or party is deciding whether or not to invest in you and your mission.
Seek Expert Advice
Experian and D&B are two leaders in the credit-reporting industry. Both reputable companies, they can help you navigate the ins and outs of this financial issue. It’s much better than trying to guesstimate a solution or strategy on your own.
Your Company’s Future Depends On It
A poor credit score for a company can lead potential clients and investors alike to question the validity and security of it—thus leading them to look elsewhere.
A financial situation in distress can hurt your company’s present and future ventures and should be addressed as soon as possible.
As the old saying goes: “an ounce of prevention is worth a pound of cure.”
Stella Walker is a writer for creditscore.net and an avid researcher of credit and insurance news. She is especially passionate about protecting consumers from credit card scam and helping students protect good credit standing.