How to Maintain Good Business Credit in South Africa
When you decide to start a business it can be very stressful and generally isn’t an easy or quick process, one thing that you must take note of is the value of maintaining a strong business credit score. Of course, making sure your business has good credit to start with is essential, but once you’ve taken the steps to ensure your business has good credit, maintaining that good credit is just as, if not more, important.
Just like an individual’s credit profile, your business credit profile will follow your business everywhere and show your current and past financial health. There are a number of simple precautions you can take to help maintain your good business credit, but here are a few tips we have put together.
Timely Repayments of any loans or credit:
Making sure that you repaying any loan or credit in a timely manner and in line with the terms of the loan or credit is important to keeping your credit score and health, whether personal or business, in good standing. Making sure that you are up to date on the payments due to creditors and paying any outstanding bills on time will also help your business build a good financial history. The benefit of making sure you are on top of your debt obligations will help your business maintain its good credit, and it also shows your business as financially responsible to any potential supplier or credit provider.
Good Personal Credit History
Realizing that your personal credit history is important and needs to be maintained alongside your business credit history. If you can get into the habit of maintaining your personal credit profile, this will carry over to how you run your company, if you pay your personal bills on time and repay personal loans in a timely fashion, those habits can carry over to your business credit, which will help you maintain your good business credit.
Separate Personal & Business Credit
It is always advised that you try at all times to keep your personal and business credit completely separate. One of the most obvious reasons would be an instance where your business falls apart or is caught in some tough times, your personal credit doesn’t then get affected or take any hits. This is especially important when you are just starting a company and it needs time to grow and become self-sustainable, separating your personal credit and business credit is a mature and responsible approach to business management and will stand you in a strong position.
Check Frequently
It is your responsibility to make sure that your business credit report is showing the correct information about your business and its financial history. By taking steps to keep tabs on what your business credit report reflects, you can make sure what’s being reported to the credit bureaus by your lenders and suppliers is accurate and complete. Keeping on top of what your credit report is saying about your business will help you maintain that good business credit you worked so hard to achieve.
Sign Up for Alerts
Take steps to sign up for alerts on status changes on your credit profile. These services are affordable and can be used to monitor either your business or personal credit profiles. By keeping on top of your respective credit profiles, you can be alerted in a timely fashion to any fraudulent or negative changes that occur on your profile and take the required steps to have them addressed before these issues cause any serious and long lasting damage.
South Africa is going through a tough economic patch and for this very reason, just assuming you have good business credit isn’t enough. Knowing your business has good credit and taking the steps to maintain that good business credit is key to helping your business be financially stable and successful. When the time comes that you additional credit or a loan for your business, you will be glad you took the right precautions to maintain your good business credit.