Many financial advisor’s will tell you that if you have no debt and don’t borrow money, your credit score doesn’t matter. In a perfect world, this might ring true, however there are situations in which a low credit score can cause you to miss out on opportunities. You already know that maintaining a good credit score can affect your ability to purchase a home or a new car, but did you know that it can also have an affect on your home based business as well?
Once you have made the decision to work from home, you will need to find suppliers. The majority of suppliers will require you to complete a credit application and your credit will be checked. A low credit score can send a red flag to these suppliers and can cost you an account. Suppliers often are willing to do business with you on an open account. You place an order, they ship the order along with an invoice stating the terms of payment, and you pay at a later date. This allows you to sell the product, make your profit, and then pay the supplier from the proceeds of the sale. If your credit score is low, suppliers may require you to pay up front. This takes your hard earned cash BEFORE you have made a sale.
While the old saying is true, “It takes money to make money.” The ability to order products and pay for them once you have had the opportunity to sell them, will prevent cash flow problems in your business. Never underestimate the importance of maintaining a good credit score.
Your credit score should be held in the highest regard. Make every attempt to maintain a high credit score. Even if you have no plans of making a large purchase, or financing a new vehicle, your credit score can play a role in your business as well. Consider that each time you establish telephone service, have electricity turned on, or even order satellite television, your credit is checked. If you have a low credit score, you will either be require to pay a deposit, or be denied service altogether.
The same holds true in your home based business. Even if you never have the need for an operating loan, your suppliers may balk at the idea of extending you credit if you have a low credit score. A decent credit score is important in nearly all aspects of life. Can you live with a low credit score? Sure you can, but it can put unnecessary hardships on you and your home based business.
