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How can I establish a good Business Credit Rating?
Home » Accounting » Business Credit Rating » How can I establish a good Business Credit Rating?Perhaps the single most important thing to remember is the necessity of building your business credit rating before you actually need that rating. In some ways that may seem counterintuitive, but it’s nevertheless important. You’ll want to begin to establish your business credit rating as quickly as possible after starting your business. Assuming that you’re able to build a solid business credit rating, you should eventually be able to secure credit for your business without resorting to personal guarantees – guarantees that could negatively influence your personal credit rating. As you seek to establish your business credit rating, keep the following considerations in mind:
• Business structure: You’ll want your business to appear as genuine and stable as possible to potential investors and the credit bureaus. If it’s feasible for you, incorporation may serve that purpose, as will obtaining the requisite licensure for your area of work. Along those same lines, prepare and update your business plan and financial statements for review by your creditors.
• Choose your business partners wisely: Remember that reporting your credit history to a business credit bureau is a voluntary action on the part of your creditors. Consequently, you’ll want to locate vendors and creditors who have a company policy of reporting credit histories to the major business credit bureaus. Additionally, seek creditors who are willing to offer you credit without referencing your personal credit.
• Debt management: As obvious as it seems, you’ll need to find ways to consistently pay your debts in as timely a fashion as possible. Regardless of your professionalism or choice of creditors, if you’re not paying your debts on time your business credit rating will suffer.
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