Visual representation of small business financial literacy - decorative

Module 4: Building Credit

Key Takeaways

  • Having good personal and business credit is vital to your business. You may have to rely entirely on your personal credit standing in the beginning since your business won’t have a track record of success most lenders are looking for.
  • You want to ask for copies of your personal credit reports at least annually and review them for any adverse or inaccurate information.
  • Lenders and other creditors use your credit information in different ways to make decisions about your business and your ability to secure credit, such as loans and credit lines with vendors and suppliers.
  • You may want to establish a relationship with a bank before you apply for loans. This can be as simple as opening a business checking account and a debit or credit card.
  • Familiarize yourself with the Five C’s of Credit. They affect your ability to get loans as well as favorable interest rates and repayment terms.