Credit is a lot like a chain saw. Used wisely and carefully, it can be highly productive and make operations easier. However, used carelessly and foolishly, the results can be devastating, even deadly, and take a long time to overcome at a high cost.

Credit allows business owners to spread the cost of supplies, equipment or services over an extended period of time to preserve cash resources. Few businesses today can function without some sort of credit from vendors or financial institutions.

Like so many things needed to run a business, it’s too late to think about establishing good credit when you really need it. Like any other good tool, it needs to be available for immediate use.

The best way to attain a good credit score is to start small. Most banks and credit unions offer credit cards to account holders. Apply for a card with a low limit, maybe $1,000. The object of this exercise is to show how fast you can pay off the charges on the card, not how fast you can reach the limit. A good plan is to make a purchase with the card, say $200 to $300 worth of supplies.

Pay this amount off in a month or two before making another purchase with the card. Do this a few times, paying the card in full each time, and then put the card away. Maybe use it every few months for something you can afford. The lender will see you mean business, might increase the card’s limit or give you a better interest rate. Most importantly, the card is there when you really need it.

Remember, credit cards allow you to spread the payment for purchases over a period of time, and that time has a cost. These cards charge interest and that increases the cost of anything you buy with them. It is critical to make your payments on time. Late charges can be costly and also result in higher interest. Before you know it, you can be paying interest on interest. Poor credit management has led to the downfall of many small businesses.

Good managers know good credit is a powerful tool. It can be as good as money in the bank. Like any other tool, it needs to be used properly and only when necessary. And, like any valuable tool, it needs to be maintained and protected.

A good credit score is worth the effort it takes to establish and is something to be proud of. Remember, it’s a business.