Why is business credit history important?

Past payment habits and credit history play a significant role in a businesses' future borrowing potential. How do you build a positive business credit?

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5

Business payment history is the lion's share of what goes into your business credit scores. Other factors are outstanding judgments, liens, etc. But the big one is payment behaviors.

Pay on time or early, as in full as you possibly can (i. e. go beyond the minimum amount to as full as your budget can stand), and that will help build your business credit.

Another piece of the business credit puzzle (it happens to be true for consumer credit as well) is to check your reports - not just your scores - and dispute any errors as soon as you can. No sense in allowing a mistake to drag down scores when you can do something about that!

4

Your Business Credit History is important for all sorts of reasons.
Just like your personal credit history it helps to show would be lenders your past payment history.
It demonstrates to them that you may have the ability to repay loans that you take out.

A small business credit history may be more or less complex than your personal credit history, depending on the age and type of your business.

2

Part of your answer is contained within your question (i.e. past payment habits). I would recommend that you take advantage of any early payment discounts that may be offered and ensure that your payments remain current. A review of suppliers account statements on a regular basis will provide you with information regarding your payment habits.

Another easy method is to obtain small bank loans from time to time which you can easily repay. Over several years your loan payment history will help provide assurance for any real needs that may come along that require credit assistance.

In short, preparing for a good credit history can definitely help if trouble ever arises. This way your never stuck without credit assistance.

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