Don’t let your credit score blow up in your face this bonfire night!

You’d think that for small businesses a high credit rating would be a good thing, and a low credit Credit Indicatorrating a bad thing, but I’m afraid it’s not that simple (it never is, is it?).  It all depends upon the point that the business is in within their lifecycle.

As a startup you will have a low credit rating because you’ve just started out on the difficult journey of running your own business, so you don’t have a history of paying your bills and managing a good line of credit.  The important thing for you is whether the low credit rating is getting gradually higher.

If you’re a more established business you will hopefully have a high credit rating because you’ve got years of operation under your belt and a long line of bills that have been paid.  The important thing for you is to ensure that this high rating continues at the same level, rather than dipping down, because downwards movement might be seen as an indicator of upcoming financial difficulties.

Either way, for both types of business it becomes important to keep an eye on the direction of the credit rating and take appropriate action to keep it travelling in the right direction, or else other businesses might be making decisions to offer you less favourable terms to your competition, or even not to work with you, both of which will have a negative impact upon your business.
Guy Fawkes
Don’t wait for an adverse incident to prompt your interest in your business’ score.  Get in there now and use a credit tool designed for small businesses like CreditHQ, and see what other people see when they do their due diligence on you, and take steps to keep the ratings moving in the right direction before your reputation blows up in your face!

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