Developing good business credit for your store is an important goal. When your store has a good credit score you will be able to gain advantages.
For instance, your business can borrow money at a decent interest rate, obtain credit from suppliers and vendors, and be perceived in the industry in a much more positive way.
For example, you will need good credit if you would like to receive merchandise on a 30 day due date, meaning that you can pay for the merchandise 30 days after receiving it.
Retailers that have really good credit, such as Walmart or Costco, are often given up to 90 days to pay for the merchandise that they receive from their suppliers.
So how can you obtain and maintain a good credit score?
You essentially need to ensure that you pay your bills on time, as well as borrow money and pay it back on time.
One way to establish a good credit score is by opening up credit cards in your business's name, using the cards to make business purchases, and paying off the balance on a timely basis.
As a side note, when selecting a credit card, try to find a card that has a cash back or a miles program. These types of programs can reward you for your spending.
You want to make sure that your credit usage is always lower than your credit limit.
On the other hand, owing money can be a potential problem, especially when sales slow down.
Many businesses fail due to having large outstanding debts that they cannot afford to pay.
Ideally, you will want to focus on building your credit by paying your bills on time. This approach does not necessitate the borrowing of money to build and maintain your rating.
Even if you currently don't see why you need a good credit score, since presently you don't need to borrow money for your business, you could change your mind in the future.
After all, one day you might decide to take out a mortgage to buy a commercial property, or you might need a line of credit from your bank so that you can grow your company.
You can check your business or personal credit at Dunn and Bradstreet, Experian, or Credit Karma.