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4 Reasons Personal Credit Matters in the International Business World

11 December 2017, 13:22 CET

Personal credit is what is used to determine if you get approved to buy a house in the U.S., and sometimes even if you get a job. Travel to Europe and you'll discover that your credit rating in the U.S. doesn't really follow over. You'd have to get a credit card issued by a bank in the UK just to start building credit abroad, and most European nations still differentiate between business and personal lines of credit.

International business

So, why should you even bother to work on your personal credit rating in the U.S. if you're going to be involved in European and international business matters? Look at the best credit repair companies stateside and you'll see that they promise the same thing - financial freedom. How do you expect to be able to travel internationally if you can't purchase a roundtrip flight to Dublin, for instance, if your personal credit is shot? Check out these four super critical reasons you should be handling your personal credit rating in the U.S. before you can even think about taking your business abroad.

1. Personal Credit Leads to Business Credit in the U.S.

If you ever intend on doing business on a major scale then your personal credit history is going to get pulled at some point. Sure, you might not even want to get a business loan in the U.S. but plan to set up your company in Italy instead, but you're still going to have to pay United States taxes. At minimum, you'll need to incorporate an LLC, a corporation, or an S-corp so that the U.S. government knows how you're making your money and where it's coming from. This means that you will have some business expenses at home and you'll probably need at least one line of business credit in the U.S.

2. Your Reputation Follows You

There are business lenders in Europe and the U.S. that work with small companies to help them get established. Likewise, there are also international lenders that will want to see both your finances and your credit ratings. So, if you have a foreign business established that's doing well but a personal credit rating in the U.S. that is less than good, you may have international business lenders wrinkling their noses at you.

3. Better Credit Makes International Travels Easier to Finance

Professionals who do business internationally usually eventually want to visit the people who they are making deals with. Your business trips to Europe may take place twice a year or twice a month, but it's going to cost you to fly out and stay in a hotel abroad. So, how are you going to pay for it? Do you have a domestic business credit card with a high available balance? Is your personal credit so good that you can qualify for a small loan? Don't wait until you need money to travel internationally to start worrying about your personal credit score.

4. Setting Smart Business Finance Habits

Even if you didn't make great choices concerning your personal credit history in the past you don't have to live with those mistakes permanently. Pay off old judgements, make good on past debts and rebuild your personal credit so that you have choices when you start to build your business internationally. This can only help you in making great business decisions going forward.

You can get a new address in Scotland, open a bank account and hope that you will eventually get approved for a business line of credit, or you can start where you already have the longest credit history. Work on your personal credit in the U.S. so that you always have someplace soft to land. You never know when you're going to need a loan to take your international company to new heights.

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