digital divide network - article database

Business credit is as important as personal credit. It’s a vital ingredient in keeping your company going. Through this, you can make purchases from your suppliers and pay for utilities that you use in your work area. However, just like personal credit, credit for your business is also a target for credit scams, bad credit, and identity theft.

You should build your company credit so that you won’t have any problems with your transactions. It will also come in handy someday when you decide to apply for a business loan. Your company’s good credit will be enough for you to get approved. The lender won’t have to check your personal credit anymore.

If you want to save your business credit, then you have to make sure that you do the same things you do to save your personal credit. It takes vigilance, persistence, and control to do this. The effort can be tedious but if you want your business to move forward, get ready for the task.

Ways to Save Your Business Credit

If you think that your company credit needs saving, then you have to kick it up a notch. The competitive world of business doesn’t stop demanding from small entrepreneurs like you. You have to keep up or you’ll just be as good as your last contract. Take a look at the following means to save your good company credit:

1. Always use your EIN or Tax ID.
   This will help enhance your credit history. If you are looking forward to getting a loan in the near future, you have to make sure that your company’s credit history is filled with professional information.
   
   
2. Open a separate bank account for your business.
   Your company needs to have a minimum of one bank reference. Wait for the account to mature for two years before applying for a loan. The account should also show that there is a consistent cash flow that could handle a business debt.
   
   
3. Establish a good credit history.
   Good credit history for your business will make it easier for you to get loans and close transactions. This means that you have the credibility and the stability to move forward with your venture.
   
   
4. Pay your company bills on time.
   This is the most important part of your company’s payment history. If you pay your bills on time, then your company’s credit will definitely be boosted up. The more presentable your payment history is, the better your company’s financial credibility will be.
   
   
5. Maintain your good or high personal credit.
   Creditors will also want to assess your personal credit especially if your company is new. If you’re a shareholder, you have to possess over 20% of company ownership. These days, lenders are asked to personally guarantee any type of credit or loan that the company has. This is more than enough reason to maintain that good credit standing.
   
   
6. Monitor your company’s credit.
   This type of practice isn’t new to consumers like you. As the company owner, you should be strict in checking the company’s credit report all the time. A regular business credit check is needed to see if everything was correctly reported and every purchase was correctly made. You should also sign up for credit monitoring. If you manage your credit with credit monitoring, you will be able to keep your company account in check. This is also an efficient way to stop identity theft or credit scams.
   
   
7. Update your credit file.
   Your company credit file should always be updated. If you do this consistently, you will positively affect your credit rating.

As a small business owner, your company credit is your lifeline. The tips provided to save your credit will definitely help you save your credit or perhaps enhance it further.

Amy is an active blogger who is fond of sharing interesting finance related articles to encourage people to manage and protect their finances. Follow her and know how to stop identity theft from harming your business and why you should check credit reports regularly.