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The Business Benefits of Having a Good Credit Score

Many business people don’t give a lot of thought to how their personal credit score affect their success in business. The truth is that your personal credit can mean the different between getting the funding you need and dying on the vine. Simply put, credit matters.

Ignoring your credit score and doing things that could negatively impact it could cause you a variety of problems such as higher interest rates on a loan to your overall business credit profile. Having excellent credit and understanding your score could help you in more ways than one. Here are some benefits of having good credit.

Qualify for Rewards Cards

One big benefit of having excellent credit is that you qualify for more types of credit cards. The top credit cards with the lowest interest rates are reserved for people who have shown a consistent positive credit history. Some of the best business credit cards offer perks and rewards that aren’t available to people with poor credit.

Imaging running all of your business expenses through you credit card and getting enough cash back to double your annual marketing budget. How would that positively affect your business from year to year? You could earn travel rewards, free hotel nights, club memberships, concierge services, and much more if you have a high credit score and are approved for a premium rewards credit card.

Get a Low-Interest Rate Loan

Having good credit is also a big pro if you’re looking to get funding for your business. Interest rates on small business loans or lines of credit can vary wildly based your personal credit score and cashflow.

When you’re ready to take on business funding, you’ll need to shop around for the loan that fits your needs and budget. Sites like Kabbage and OnDeck are a good first start since they aggregate loan options from different banks so you can find the right loan for what you need.

Pay Less for Your Fleet of Cars

For businesses that need to invest in a fleet of cars, trucks or vans, having a good credit score can mean huge savings on interest. Even if you lease vehicles for your business the monthly payment can be almost double for poor credit ratings.

Your credit habits could influence the lender’s decision about how much you’ll be able to finance. If you have a top credit score, you can usually finance more money and have lots more flexibility with finding the right deal.

Avoid Security Deposits

Another place where you stand to benefit if you have high credit is with your utility provider or landlord of the office building you lease. When you move into a new office building and have to get your gas and electric turned on, you may be asked to put down a hefty deposit depending on your credit score.

A low credit score means there is a little more of a risk, so utility providers and leasing companies are more likely to require a deposit. If your credit is high, you may be able to skip the deposit. Check your credit score before submitting your application.

Negotiate More Possibilities

Next, negotiation is so much easier and more effective if you come to the table with the asset of a top credit score. If you’re trying to negotiate your loan terms, you’ll likely be fielding multiple offers from a variety of lenders. Let them compete for your business and outdo each other with the lowest interest rate. You can use your other offers as a negotiating term to get the lowest possible rate for a personal loan.

Finance Almost Anything  

A strong credit score makes it possible to qualify for financing in almost any situation. While it could hurt your score to have lots of different outstanding loans on your file by increasing your debt-to-income ratio, a few loans are actually healthy for your credit report.

If you have a strong credit score, congratulations, you have access to a few more privileges than someone with a lower score. Aim for the highest score possible by adopting healthy credit habits, such as paying on time, eliminating high balances, and only financing what you can afford.

Matt Shealy

Matt Shealy

Matt Shealy is the President of ChamberofCommerce.com. Chamber specializes in helping small businesses grow their business on the web while facilitating the connectivity between local businesses and more than 7,000 Chambers of Commerce worldwide.

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