For the one-in-five self-employed Kiwis, or those who own a business, the impact of your personal credit score on your business can be significant.

Business director reports are often requested by many banks, finance companies, utility companies, and large corporations, as a part of their standard credit check on a business.  Your consent is necessary for a business or organisation to view your personal credit report. You will likely find it is included in your agreement/terms of trade with these businesses as standard practice.

As a company director or owner of a small business, your personal credit behaviour is likely to have a strong correlation with the credit behaviour of your business.

If you have a high personal credit score, it’s a great indication that your business is in good hands with someone at the helm who pays their bills on time and is in a good financial position. On the flip side of course, if your credit score is low, this will likely affect the perception potential credit providers have of your current financial stability.

It’s a great idea to order your personal credit report – it’s free and takes just a few minutes. It’s a good first step to understand your credit history and see if any factors are bringing your credit score down, such as regularly making late payments, a common issue that affects many consumers.

Additionally, if you are experiencing financial difficulties, it’s important to discuss payment schedules with any business you have borrowed from or get services on account. This can help prevent you from falling into default with any of your credit providers. To read more about how to improve your personal credit score, click here.