Your Credit Score and Your Business
In a highly competitive marketplace, one can know how tenuous their business existence can be. That is why business owners should protect the interests of their business financially and by its reputation. Your business plans can fail and profits affected if you make a wrong move with your business.
How is your personal credit score? Your business can be affected by the state of your personal credit score. Below are some of the ways that credit score can impact your business.
There are many ways by which your credit score can potentially affect your business. Business loans can be affected by your credit score.
Personal credit scores are checked by banks and lender before they approve of a business loan applied for. It is very risky to business operations if a business owner has a low credit score, even if the business is doing good at present. Many loans applications are not approved by financial institutions if there is an individual associated with the company that has a low personal credit score.
However, not every lending institution check personal credit scores. As long as the business is operating with sustained and consistent cash flow, these lending institutions will approve loan applications. They look at the business’ history of revenue to determine whether to provide the loan or not.
Anonymous donors and venture capitalists don’t look at personal credit scores to lend you money for your business. As long as you have a functional business plan or if you are already doing a steady amount of business, many individuals or investors will grant the loan the you need.
There are people who are not aware of what their personal credit score is. There are a lot of ways that you can know your credit scores and this is through free and premium services designed to keep you updated on this.
There are three major credit bureaus that do this service for business and individuals. Experian, TransUnion, and Equifax are the three major credit bureaus that can calculate your credit score. When they calculate individual credit scores, there are differences and so the results are also quite different from each other. However, most lenders evaluate all three credit ratings before deciding about lending you money.
It is still possible to improve on your credit score if you find it rather low.
Your personal credit score can actually impact your business and success. Make sure to keep your personal finances intact if you want to ensure that you have access to credit and loans when you need them. If you want your business to survive for a long time, take time and effort to rebuild your credit score if it does not look great at this point in time.