Your business credit rating is highly important. It can determine how effective your company runs in the present, and even start to affect the long-term, big picture plans of the future. In the end, many businesses fail all the time in what are frankly silly, preventable ways. One of these sure-fire ways to flop is by underestimating the power of the business credit rating.
Consequently, here are 5 things you didn’t know about your business credit rating.
Your business credit rating is available as public record. This means anyone can search and read up on the data and know exactly where your business stands financially. You can’t cover up mistakes here. Investors, banks, and anyone else who’s in the position of lending your money will look at these records before they part with a penny, so don’t inflate or exaggerate the data on your side.
Most entrepreneurs love that feeling of control. However, the wiser entrepreneurs know that they’re not all powerful. It might be that a waning industry or turbulent political period has caused your spending habits to be less than ideal, and your business could be subject to poor, outside circumstances. If you’re scrambling around in a financial hell because of the economy outside, you might just see your credit rating take a nosedive, regardless of your best intentions.
It can be hard to get out from under the shadow of your financial obligations. No matter what decisions you need to make for your firm or what problems you’re desperate to fix, all the roads eventually lead to same place; money.
Therefore, if you have a poor business credit rating it can soon feel like the end of the road for you and your company. Well, that’s not quite true. There are companies out there to help you if you do have bad credit, meaning that when times get tough you have someone who may take a chance on you with their money. Nevertheless, make sure your company doesn’t run solely off the generosity of others; it’s a contingency plan, nothing else.
Investment from others is rarely about the question of whether your business will change the world. Often, the decision is solely based on if your company is reliable, no matter what scale it’s operating on. If you’re running a small startup or are heading something a bit bigger, it doesn’t matter; the rules are the same for everyone.
You can boost your business credit score by making repayments of any shape and size. You could even take out smaller loans you know you can pay back, do so, and thus improve your score. In the end, it all shows that you’re organized and sensible with money, instead of convoluting your company with unrealistic expectations.
Length of Credit History
Another factor influencing your business credit rating is simply how long it’s been around. A company that has an extensive, yet proven track record will always fair better than a company with a poor history, or sometimes worse, no history at all.
Therefore, don’t be discouraged if you haven’t landed that killer investment yet. After all, it may just be a case of how young your business really is. Hold fast and bide your time with small repayments that build up your reputation and go from there.