By the time you graduate high school and enter into the adult world, you have a basic understanding of credit scores and how they work. If you have good credit, you can take advantage of the benefits it offers, but if you have bad credit, you can feel the effects of not having managed your credit score wisely.
Our team at Corporate Capital has the experience and skillsets to help you grow both your business and individual credit scores. We want you excited about having great credit score so here are some ways having a great credit score can benefit you.
Great Credit Score Benefits
– Better chance of approval for loans and credit cards: Have you ever been turned down when asking someone on a date? I know I have! Imagine being turned down for a loan for money you desperately need to either start or grow a business. Although it’s not guaranteed you will get a loan based on your credit score alone (your income and any other debts are also taken into account), you have a much better chance. To quote the movie Dumb and Dumber, “So you’re saying there’s a chance?” YES! There is with the proper business credit.
– Get low interest rates on loans and credit cards: Majority of the time, your interest rate is going to be based on your credit score. You will be able to pay off your loan more quickly with a lower interest rate as well as leave money for other expenses. With the power of a high credit score, you may even be able to negotiate a lower interest rate.
– Higher amount of loans: You are more trustworthy in the eyes of banks since you have demonstrated you can pay back what you owe and on time. Therefore, more money can be borrowed, and the nice part is you are building the relationship to eventually get rid of the personal guarantee!
– Land a great apartment or home (share this with your kids 😊): When looking at apartments, a landlord or property manager may want to determine your reliability and whether you’ll be able to pay on time each month. You will want a great interest rate when it comes to purchasing a home. With a large loan such as this, having even one percent lower interest rate could potentially save you thousands over time.
– Buying your dream car with reliable insurance: When purchasing a vehicle, auto insurers will be evaluating your credit score and may even use it against you, saying people with lower credit scores file more claims, ultimately leading to higher insurance premiums. Not only will you get a better interest rate with great credit, you will pay less for auto insurance. From a business perspective, you will be able to lease or purchase vehicles directly under your corporation or LLC without having to sign a personal guarantee. Your business will have enough credit history that getting approved will be easy!
– Funding your business: Most startup businesses don’t have enough cash to fund your entire business venture. In order to afford expenses (resource materials, advertising, location costs, etc.), you will most likely need a loan. With great business credit, it will be easier to qualify for a loan and get better loan terms under your corporation or LLC. Not to mention, you will establish better terms with suppliers and protect your own personal finances, thus giving you what you need to expand and grow.
The Effects of a Bad Credit Score
With so many benefits to having great credit, you are probably wondering what are the disadvantages of having bad credit. Well, you certainly won’t have access to the benefits listed above. But did you know there may be even more downsides than missing out on great benefits?
That dream apartment? You may be charged a hefty security deposit or even have to co-sign. Auto insurance payments? May hike up much higher than you would like. With even slightly lower credit, you can miss out on benefits and be targeted by lenders for extremely high rates and fines.
What Can You Do?
You want to set yourself up for these great benefits and avoid running into extra fees and high interest rates. Whether you have been in business for less than a year or 50 years, want to take a small loan out to pay for a car or make a large investment in a new home, Corporate Capital can help you take the right steps. These include:
– Making payments on time
– Paying off debts
– Balancing your checkbooks
– Setting up a payment plan
– Knowing your credit score
– Always paying off open accounts
– Using a credit counselor
– Avoid collections
– Utilize different types of credit
– Make sure to separate business and personal finances
– Keep your credit card balance low
– Apply for credit only when needed
When it comes to a business, your credit score is aligned with your credit rating – businesses rated on a 0 to 100 scale. This business credit number is based on the company’s credit obligations, repayment histories with lenders and buyers, judgements or bankruptcies, business type and size, and performance in comparison to similar companies. It also relies on the following:
– Credit (payments, debts, balances, etc.)
– Demographic details (type of business, age of business, etc.)
– Public records (collection agencies, state filing offices, credit card companies, etc.)
If you are looking for a reliable source to help you build your credit, look no further than Corporate Capital. We are here to help you build a future for your family, your business and any other pursuits. Give Corporate Capital a call at 855-371-0070 today to set up a consultation – it’s FREE! Located in Las Vegas, NV, we have the privilege of working with over 13,000 clients across the country. No matter where you live in the United States, we can help. With experts who have been in this type of business for over 30 years, you can count on our team to give you the financial advice to build a better tomorrow. Don’t hesitate to call our team for a FREE consultation today!