Your credit score is more than just a number. If you run a business, your credit score can have a very real impact on the way you operate and is something you need to take seriously.

Want to buy a new car or equipment as part of a business loan? Your credit score will determine whether your application is successful – or not.

If you’re worried about yours, here are some practical ways to keep it in good order.

Close Down Those Credit Cards

Want to know what a high-risk customer looks like in the eyes of the bank? Someone with multiple credit card applications.

Every time you apply for a new credit card, the lender performs an ‘inquiry’ – basically, a check of your credit file. Because these inquiries are stored, if you’ve been looking for credit cards, you’ll present as a credit risk.

The system rewards people with fewer credit applications – they have a higher credit score. So, before you jump in and apply for yet another card just because it’s offering a discount at the register, think about the bigger cost to your credit score.

Avoid Late Payments

These days, with all your credit info easily found, late payments of bills affects your credit score.

The thinking is sound – if you can’t pay your electricity bill on time, you might not pay other debts on time, either. Of course, one or two late payments isn’t worth having sleepless nights about, but regular late payments are a real problem. Plus, if you are sensible about tightening your budget, it’s smart to pay your bills early to receive early bird discounts that can save you hundreds of dollars.

Create A Positive Credit History

Although you might think a history of no credit cards is a great thing, if you have no credit ranking at all, banks can get nervous too. To create a positive history if you have not been on the credit ranking radar, consider getting a mobile phone payment plan to establish a quick credit rating for yourself. Just make sure you understand the fine print of what your contract requires and make sure you meet every payment by the due date – preferably before!

If your credit number is looking shaky, don’t despair. It’s not the end of the world. Although it can affect your ability to gain credit, it can be repaired over time. Talk to a financial counsellor about how you can rectify past damage and create a more positive credit footprint for your business-building future.

For more information, visit Veda.