Business Credit Considerations

When you are looking for financing for your business, you need good business credit. Having business credit that is separate from personal credit is a good idea, since it can protect your personal finances from business failure, and it can help you establish your business as its own credit-worthy entity. Here are some business credit considerations:

1. Multiple accounts: With personal credit, multiple accounts, even if they are in good standing, can be detrimental. Business credit is different, though. Multiple active business credit accounts in good standing boost your business credit score.
2. Payment timeliness: One of the biggest factors in your business credit score is whether or not you pay on time. You get bonus points for paying early as well. With personal credit, paying late can hurt you, but early payments don’t help.
3. Ask vendors to report: While personal creditors have to report you good behavior to credit bureaus, vendors don’t have to. So ask your vendors if they report payment performance to business credit information providers. You can also self-report some of your company information.

Having good business credit is essential. Without the ability to keep cash moving through your organization, you can quickly run into trouble. Being able to obtain financing is important, so having good business credit is vital to the operation of your business.

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