"I am careful about my FICO score for personal reasons however now that I'm a business owner I'm wondering how that could affect my business (if at all). What are some of the things I need to be aware of surrounding credit and running a business?"

June 30 2009 - Syracuse Post Standard

Theresa:
You personal credit score for a sole proprietorship is your business credit score when it comes to things such as lines of credit, purchasing equipment, signing leases, etc. You are wise to be diligent and keep a close eye on your FICO score.
I subscribe to a daily credit monitoring service and recently had an alert come to my email when an account had erroneously been placed on my credit report. Luckily I was able to research it the day it happened, dispute the reporting and have my attorney write a letter to clear up the mistake. It was amazing that this one incorrect report of a $62 bill temporarily lowered my FICO with the one reporting agency by almost 100 points! Keeping a watchful eye is imperative!
In the same way your credit history affects your interest rates on car loans or mortgages, when you’re a business owner, it will also affect your business rates on equipment leases, business credit cards and other purchases your company needs to survive.
The more you know about how others view your credit worthiness, the better position you will be in to effectively manage your business.

Julie:
It’s great that you’re already careful with your personal FICO score, because it will definitely impact your ability to get credit in your new venture. Aside from the obvious – paying your bills on time and not overextending yourself, there are other things to keep an eye on. For one thing, you should be monitoring your credit report for mistakes. I thought that I had gone over mine pretty carefully and caught all the errors, but during a recent meeting with my banker he pointed out a few “minor” mistakes on the report that were probably costing me 10-30 points on my credit score. Having a banker that you have a relationship with is invaluable, and a good one will go over your credit report and give you some pointers about how to improve it if it needs work. If you’ve been vigilant all along, you’re one step ahead of the game.
Your next move will be to open trade accounts with your vendors. When you start doing business with a new vendor and are looking for terms, they will want to see that you have a history of paying your other vendors on time. Getting the first one or two is tricky sometimes, but in a new business the vendor can look at your personal credit history in lieu of having a lot of vendors you are already established with.