As a business owner, you probably already know the importance of keeping your personal and business finances separate. However, despite your best efforts, there are ways your personal finances can impact your corporate ones, and you need to know about this.
Your credit score can impact your lending options
Your credit score is important. It can make a difference in terms of being able to lend money to progress your business, whether this is for a company vehicle or to buy new premises. So, how can you improve your credit score? Here are some tips:
One of the first things you should do is determine whether you even need to pay back the money that you owe. We would recommend taking a look at the Debt to Success System – DTSS Program Timelines. This can give you some insight into the different solutions that are out there when it comes to getting out of debt. Sometimes people are in a financial rut and they should not even by paying back the funds they are supposedly obligated to. There is a lot of financial information like this that a lot of people simply do not know about.
Another step that you should take is to make sure that the information on your credit report is accurate. There are a lot of different agencies out there that make it possible for you to get access to your credit report. It is recommended that you do this because sometimes banks and other institutions make incorrect reportings to the credit agencies. This can result in your score taking a hit, which is the last thing anyone wants, especially when it is not due to their own fault. So make sure that your report is accurate and report anything that is false.
It is also advisable to stop cancelling credit cards whenever you pay them off. This is because by keeping your credit card open, you are essentially expanding the amount of money that is available to you, and this will help to keep your score positive. Essentially, you have money available to you, but you are not using it, and so this tells lenders that you are not relying on credit, and so it can help to improve your score as a consequence.
Suppliers may look into your financial history
More and more brands and suppliers today want to ensure that they are working with upstanding publishers. They do not want to risk their own reputation or financial security by establishing a contract with or lending to someone who is not reputable. Suppliers will often look into your payment history to make sure you have a habit of paying on time. If you don’t, this could come back to haunt you and your company.
You may need to offer some form of reassurance or agree to pay some of your payment upfront in order to reassure suppliers that you will pay for the goods and services you need.
Your personal situation can clearly impact your business situation, so it is important to manage both areas of your finances.