Your Credit Score and Your Business
In this high competitive world, one would feel the fragility of your business existence. That is why business owners should protect the interests of their business financially and by its reputation. One business mistakes and it can affect the growth and prosperity of your business.
How is your personal credit score? Your business can be affected by the state of your personal credit score. Here are some of the ways that your credit score can affect your business.
The truth is that personal credit score can potentially affect your business in many ways. One of these ways is that it affects our business loans.
When there is an application for loan, banks and lenders check personal credit scores when factoring whether to give you a loan or not. 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.
There are lending institutions, however, that don’t check on personal credit scores. As long as the business is operating with sustained and consistent cash flow, these lending institutions will approve loan applications. What helps them determine whether to provide a loan or not is the business’ history of revenue.
Personal credit score will not affect the granting of business finances by anonymous donors or venture capitalists. 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 their credit scores. 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.
Credit scores used by businesses and individuals are calculated by three major credit bureaus. They are Experian, TransUnion and Equifax. They all have slight differences when they calculate individuals’ credit scores and sometimes that results that they display are radically different. Lenders, on their own part, evaluate all three credit ratings before they give approval to your loan.
If you have a low credit score today, it is important to improve on it.
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. Although it takes time, effort, and money to rebuild a low credit score, it is possible and well worth it so that you business will survive the competitive marketplace.