Sponsored by ScoreShuttle:
If you’re starting a new business, you’ve probably spent hours researching your market, potential outreach, revenue, and strategies. Sound familiar? Even though you’ve already done the bulk of your prep work, many entrepreneurs don’t consider their credit as an essential factor to the success of their businesses.
If you thought credit was a personal issue, think again. This is your guide to why your personal credit can contribute to more success as an entrepreneur.
To put it simply, starting a business can be costly. Most of us don’t have enough savings to fund our own companies without reaching out to banks and/or investors for additional funding. See where we’re going with this? Although your personal and business credit are two different things, lenders look at your personal credit to determine if your business is worth lending to. Bad credit can affect your chances of receiving the funding you need.
Better Interest Rates
The benefits of having good credit is potentially qualifying for lower interest rates. Whether we’re talking about a loan, credit cards, or insurance — the better credit, the better rates. In fact, with an excellent credit score, you can save hundreds to even thousands of dollars over your business lifespan.
Although you might view yourself and your business as two different agencies, investors do not. If banks or investors consider your personal credit a high risk for collaboration, chances are your long-term relationships are at stake. Therefore, you’re better off improving your credit before building relationships.
There are many ways to enhance your credit. First, always stay on top of your payments. Pay all your bills in full and install direct deposit to avoid missing the due date. Second, never max out your credit cards. Aim to spend less than 30% of your credit card limit.
Lastly, it’s always a good idea to speak to a specialist to verify the accuracy of your report and help you achieve the highest score possible. Companies like ScoreShuttle are a great resource. They can help you stay connected to credit lines, streamline the dispute process, and even help reach your ideal score in less time than you may think. With great credit on your side, your business can thrive to its full potential without missing out on the best deals.