03/10/14

You Credit Score: One of Your Most Valuable Business Assets

As a teenager I worked in the warehouse and drove the delivery truck in my Dad’s small industrial supply business. For the first few years, the delivery truck was an almost 20-year-old truck that had seen better days. I did my best to keep it running in tip-top shape, but it was a very used truck. I knew my Dad considered the delivery truck an investment in his business—so, as the delivery driver, I considered it my responsibility to take care of it.

A year or two later, he bought a brand new truck. It had the company name on the side and I was proud to be the guy who got to drive her around town. I remembered what he had said about how I would probably be the person our customers would see more than anyone else. With that in mind, in addition to keeping myself clean and presentable, every Friday afternoon before the workday was over, I’d wash and often wax the truck before pulling it into the warehouse for the weekend. I wanted to make sure that as long as it was my responsibility to keep and maintain what my Dad considered an important asset, I would do the best I could.

I don’t know how many small business owners look at their investment in this type of equipment as an important asset—delivery drivers are notorious for being hard on equipment (I couldn’t help but notice even the delivery drivers that followed after me didn’t take as good a care with my Dad’s trucks as I did). However, as a young guy working for my Dad, he impressed on me how important it was to take care of the equipment we needed to do business.

I don’t think he included his credit score in that list—but he should have.

He was pretty cautious with his credit, he would borrow money for the business when he needed it, but only for the things he couldn’t do without. Nevertheless, I don’t think he thought about his credit score, and the associated ability it gave him to acquire capital when needed, as an asset. I have to admit, I don’t think I thought of it that way until a few months ago. In a conversation about credit with a lender not too long ago, he suggested a small business owner’s credit score was a precious asset that should be protected, but far too many small business owners don’t think about their credit score until they need a loan—and sometimes, that’s too late.

He argued a small business owner’s credit score is one of their most important business assets, and should be treated that way. Do you know your current credit score? Do you know the credit history creditors see when they view your credit report? It’s become so incredibly simple and inexpensive to do, there’s almost no excuse for not monitoring your credit. Last week, when writing about credit score, I shared what creditors see when they look at your score. Before you visit a bank or other lender, you should know your credit score and have a good idea of what any potential creditor will see. The three major credit reporting bureaus, Experian, Equifax, and TransUnion all offer an inexpensive peek into what lenders are seeing.

Click HERE if you’d like to know what creditors are thinking when they view your credit score.

Small business owners also have a business score. Click HERE to learn more about that.

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About the author

Ty Kiisel

Small business evangelist and veteran of over 30 years in the trenches of Main Street business, Ty makes small business financing and trends accessible in common sense language devoid of the jargon. Ty writes about small business financing and other best practices for Lendio, in addition to sharing his passion for small business every week on Forbes.com. He’s also the author of the book, Getting a Business Loan: Financing Your Main Street Business.

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