Why is credit important to small businesses?
To ignore your business credit could be a fatal mistake. It's an essential link in the chain of success. If you are concerned about your company's image that you customer base sees, you should be just as concerned about how your business credit looks to essential people like lenders and potential business partners. And just think of how your personal credit can affect your life – the difficulties that bad credit poses for an individual can end up plaguing your firm too.
It's important to maintain a business credit profile that is distinctly separate from your personal credit profile. Building separation between the two can help your business develop the credibility that matters to banks, suppliers, and other creditors. A business credit profile that includes multiple, positive reports from financial institutions, vendors, utilities, telephone accounts, lessors, and other operational credit accounts in your company's name shows that your business pays its creditors in a timely manner. Maintaining separation can also protect your personal credit profile should a financial mishap occur in the company, and, conversely, can help insulate your business from anything that might have an adverse affect on your personal credit.
It's also important to remember that anyone can view your business credit report and score for any reason, unlike the information in your personal credit file.