When applying for business financing or trade credit, your credit history will play a key role in the decision-making process. A financial institution or business that is considering extending credit to you will look closely at your past credit performance. Specifically, they'll want to be sure that you've honored obligations in the past and that you've maintained a history of prompt payment. It is a lot easier to build and maintain a strong credit record for your business than it is to repair a damaged one. The single most powerful tool for maintaining a strong credit profile is simply paying debts on time.
Slow payment is the primary cause of a weak credit report.
In evaluating your creditworthiness, trade creditors and lenders will take into account various factors about your payment history, including how recent your last instance of a delinquent payment was, how late it was, and the total number of delinquent payments on your credit report. Qualifying for Financing Financial institutions will look at both your business credit profile and your personal credit history when making a credit decision. Many business owners are surprised to learn that lenders often consider the owner's consumer credit bureau report to be the single most important indicator of the likelihood of repayment of financing. So a business owner with a strong record of prompt repayment of consumer debt is generally in a strong position to apply for credit from a financial institution. Financial institutions also check your business profile, which includes your trade payment history and other information about your business.