Your credit score can affect your business in at least two ways:

1. Cash Crisis

If your home business ever faces a cash crisis, then a good credit rating will allow you access to loans and lines of credit to cover the temporary short-fall. Unfortunately a bad credit rating is more likely to mean you won't have the safety net of other peoples money to help out if you're in a cash crunch.

2. Opportunities Taken or Missed

Your credit score can affect the choices available to you and it can color all your business decisions. If, for example, you have a good credit rating - then you're more likely to approach a lending institution for the money you need to purchase equipment or to take advantage of an opportunity to grow your business. However, if your credit rating is poor, then you're more likely to fail to bother applying for credit with banks or vendors and could thereby find yourself forced to use cash on hand for necessary equipment.

Although your credit score can affect your business and a good credit score can only help you grow your company faster and more confidently. A poor credit rating does not mean you're going to fail. There are things you can do to build your home business regardless of your credit score:

* Increase sales revenue by finding new business and generating repeat sales
* Actively pursue unpaid accounts
* Decrease your overhead costs (move to a cheaper home, sell one of the vehicles)
* Stabilize household revenue (get a part time job if you work home full-time and invest all business income back into the company for a while)
* Get help (Small Business Administration)
* Get domestic help (Babysitter a few days a week, House-cleaner at least once a week... This may seem like a waste of money, but you need time to focus on your business and will probably earn a lot more if your personal and professional needs are balanced.)

Yes, your credit score affects your home business, but it's just one of many factors that will determine your success or failure.

Learn more about this author, R Marie Taylor.
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