Good Credit Makes it Easier to Start a Business
You’ve got the best idea for a company. It’ll make a hundred grand in the first year, but will you be able to pay off the starting loan? If you’ve got great credit, there’s a pretty good chance that you could.
There is a difference between business credit and personal credit though. While starting from scratch, building off of your personal credit and resources is a vital step to success. Unless you’re the master of social lending platforms or have ready access to a micro-credit organization, a little extra starting capital could really help. Having good credit will get your company more money and lower interest rates. As an entrepreneur knows, those first couple of dollars go the furthest.
Good Credit Makes Getting a Job Easier
Not at the place to start your own company? That doesn’t matter. Credit will affect your livelihood even if you’re working for someone else. It is possible to not be hired because your credit sucks. It’s not a totally lost cause. There are a ton of ways you can improve your credit score or work around the trail of financial woe following you around. Active maintenance is a great step to take. This means checking your score (there are free sites to do this) and making consistent payments.
Just by living, you can build credit (paying bills, cell phones, etc.) but having a source of credit building actively working for you will amplify any efforts. You could even do something relatively low risk to start, like a pre-paid credit card under your own name. Time will also help you succeed. Most credit ‘dings’ only last 7-10 years. This means that missing a payment now won’t follow you around forever, plus there are a ton of ways to improve your credit.
Good Credit Means Lower Borrowing Costs
Because people with higher credit scores tend to get better interest rates, you pay less in the long-run. The benefits of good credit means that you pay less interest and have more money in your pocket.
Not only is it better interest rates, it’s better cell phone plan rates, lower car insurance. There are so many things you can do with great credit. Certain utility companies offer locked-in rates for consumers that have good credit. It’s all money that you don’t have to spend now.
Good Credit Gives Your More Freedom
Getting a job, more money and being able to start a business offers a certain degree of freedom. This is what having good credit has to offer. When you need a little extra cash or want to stretch a little more on this pay period, good credit can give you the freedom to do so.
Whether you’ve had a bank account a couple months or just missed a few payments, building back up to great credit score can really help you out. If you can’t figure out where to start, look the factors that affect your credit score, and figure out where you’re making a mistake (you might just need a little time). There is financial freedom with good credit, you’re not tied to the numbers in your bank account today.
Photo: Flickr: Simon Nowak