Every individual or legal entity that has the ability to procure credit has a credit rating. For instance, businesses and companies usually take out commercial loans, equipment financing, short-term loans and other types of credit facilities. They also procure goods and services on credit terms, so they must have a credit report. If you own a company, it is important you do everything possible to safeguard and build the credit rating of your business. After all, a high credit rating will entitle your business to a low-interest loan and favourable financing terms and conditions.

When planning to sell a company or to merge with another company, the credit rating of your company will determine the price it can fetch as well as the terms and conditions. Therefore, you need to protect your credit. The following are things that can affect the credit rating of your company:

i) Late Payments

If you consistently delay to pay your invoices, loans and other bills, your Vietnam company report will be adversely affected. After all, suppliers, lenders and other stakeholders in the industry are usually required to report both prompt and late payments; the latter can affect your credit negatively. Be sure to pay your bills, loans and settle invoices in a timely manner to protect your credit.

ii) Insufficient Payment

In these harsh economic times, it is normal for businesses to find themselves in financial distress. For instance, your company may not be able to pay its monthly bills. As a result, lenders, utility companies, suppliers and other firms will notify credit referencing bureaus about the default. A negative entry on your credit report will have an adverse effect on your credit and affect your ability to procure affordable credit.

iii) Bankruptcy

While bankruptcy can help businesses to get rid of their bad debts, the bankrupt entity will be adversely listed. After all, credit reporting agencies will be notified about the bankruptcy decree. If you seek to have your company declared bankrupt, therefore, you should know that your credit will be adversely affected. The worst thing about bankruptcy is that the entry will remain on your Vietnam credit report for several years. This means that you will not be able to access affordable credit for a long time.

It is important to note that any interested party can pull your Vietnam company report. That is why you need to be careful about how you deal with credit.