The Impact of Your Credit Score on Your Business
In a highly competitive marketplace, one can know how tenuous their business existence can be. Finances and reputation are two important things that business owners should protect. Your business plans can fail and profits affected if you make a wrong move with your business.
This brings us to the question about 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.
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.
Personal credit scores are checked by banks and lender before they approve of a business loan applied for. Even if your business is doing great, a low credit score can indicate risk and financial burden to the individual which could impact his business operations. If there is an individual associated with the company that has a low personal credit score, most financial institutions will not approve their loan application.
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.
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 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. Three three major credit bureaus are Experian, TransUnion and Equifax. When they calculate individual credit scores, there are differences and so the results are also quite different from each other. Lenders, on their own part, evaluate all three credit ratings before they give approval to your loan.
It is then important to improve your credit score if at present it is not in its best form.
Your personal credit score can actually impact your business and success. If you want to make sure that you have access to credit and loans when you need them, make sure to keep your personal finance intact. 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.