Warning: A couple of late payments, up to seven years ago, can cost your home-based business thousands of dollars.

Really, it can. It is one of the great small business ironies. Owners who would work hundreds of hours to squeeze out a few thousand dollars more in sales, seem to have a hard time spending the requisite few minutes it takes to cut their costs by thousands.

They fail to realize that paying bills late doesn't just cost you $20-30 in late fees, but it affects the very thing lenders look at when they decide your cost of borrowing. The difference in monthly payments between an excellent credit score (a FICO score over 800), and a great credit score (a FICO score from 750-799), can amount to thousands of dollars annually.

Additionally, a poor credit score may affect your ability to even start a home-based business. Besides the possibility that entrepreneurs won't be able to get the financing they need, many franchises may not even accept potential franchisees with low scores. From their point of view, someone who has been unable to successfully handle money in the past, may not be a good candidate to represent the company's name.

So, if you find a less than desirable credit score affecting the cost of your home-based business, here are a couple of quick tips:

1. Get caught up, and stay caught up on your payments. Late-payments stay on your credit report for a maximum of seven years, so your credit score will rise if you begin caring for it.

2. Consider getting a co-signer with better credit. Their higher score may help secure a lower rate.

3. Seek out SBA and minority financing. The Small Business Administration helps entrepreneurs get small business loans to get them off the ground. They offer loans whose rates are subsidized and guaranteed by different government agencies, with especially friendly terms for women and minorities.

In the end, your credit score may be one of the most important assets your home-based business has. If you care for it as such, you will ultimately work less to keep more!

Learn more about this author, Ken Clark.
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