4 ways you are unknowingly hurting your business credit

Having a credit card in the name of your business and promptly making payments will help build your business credit.

By Henry Brown

One of the biggest juggling acts in life happens to entrepreneurs. Running a small business takes a lot of grit and stamina – mainly because you have to make extremely tough financial decisions. Everything you decide for your business comes down to finances, and once you make those decisions you have to be very sure about them. Some business owners end up in the situation where they have to choose between paying staff and paying vendors, which is never a good place.

Paying staff will usually win out, of course, but choosing not to pay vendors can do a lot of damage to your business credit score. Sometimes though, it’s worth it. It’s worth not paying your vendors in favor of ensuring that your staff are covered and when you are backed into a financial corner, you generally don’t think about how your credit score gets affected. A lot of things can affect the credit score of a business, taking out credit cards for fair credit and further borrowing from the bank are just two of them. But there are a lot of ways that businesses are making mistakes with their credit. Let’s look at some of the ways you could be making mistakes without even knowing it!

[amazon_link asins=’B012LFQX2K’ template=’ProductAd’ store=’succeedingin-20′ marketplace=’US’ link_id=’1f2db546-ec99-11e7-a0d6-d58b0944120e’]-Not checking your report. Just with a personal credit score, you have a business credit report that you need to be able to check regularly. If you aren’t regularly checking for errors on your report, then you won’t be aware of any issues that are cropping up. A couple of times a year, you should be logging in and checking your credit report for errors, then reporting those errors so they can be rectified.

-Paying bills late. As a business owner, you want to be seen as reliable. If you are paying your bills a few days late every single month, this could be hurting your credit score a lot. Personal payments can be made a few days late if you are bridging the gap between payment owed and payday, but business payments don’t work like this. Paying your business dues early or on the exact pay date gives your credit score a boost!

-Using personal credit. If you are relying solely on personal credit, you’re not only putting a strain on your personal credit score, you’re not building your business credit in any way. Getting a couple of business credit cards is important the moment you start out so you can begin to build up your business credit.

-Ignoring your business credit score. If you aren’t watching your business credit score, you won’t be aware of anything going vastly wrong, such as identity theft. If you are vigilant about changes in your business credit score, you can be far more aware of what’s going on with your finances.

Don’t make these silly mistakes. It’s not hard to take the right steps and be vigilant about your credit score, so make sure that you are paying attention!

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Henry Brown is an online marketing executive. When he isn’t talking shop he’s roaming the streets of London, uncovering the extra-ordinary in the ordinary.

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