Talking Cents

Some credit record tips from your Melbourne small business accountant

Since 12th March 2014, credit reporting in Australia is regulated by a new “Part IIIA” of the Privacy Act. This addition comes as part of the reforms to the Privacy Act 1988 which allows for more comprehensive credit reporting.

The only way for credit managers to assess you accurately is from the records you provide them. Credit worthiness is important and now it’s your turn to be proactive about it. Here are a few tips from our small business accountants to assist in excellent credit records.

1. Be punctual, pay on time The most straightforward way of positive credit rating is to pay within terms and on time. Do you know that almost 60% of the invoices were settled after the standard payment period in Australia?
2. Personal records can be important Particularly for a growing small business owner, your personal consumer credit record can be really important. Often you and your business can potentially be looked at as one of the same.
3. Debts down Simple equation: the more debt you have, the unlikely your creditor will extend credit. It is because it implies that greater risk. So, use your equity and debt financing wisely.
4. Don’t miss out any data in credit report Up-to-date information tends to increase the likelihood of a lender accepting your application. One easy way to do that is to engage a professional business accountant to make sure all is in order.
5. Referrals Ask for referrals if you have a good record of making payments on time. Referrals will make it easier for new lenders to check your records. Use that information as your strength!