Money Buzz 10/03 Simple tactics for avoiding bad credit; wooing top-notch talent to your board

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The continued weak economy has hit small businesses hardest, andmany have struggled to keep their credit ratings intact. Butexperts say that even in a downturn, you can do simple things toavoid bad credit.

For one, you should regularly review your credit report, aseemingly easy task, but one many businesspeople fail to do. Youcan also sell noncore assets, a move that demonstrates to lenders acommitment to pay bills. What's more, experts say, you shouldbe proactive with your vendors. If vendors are not paid on time,they might call your banker, causing your credit rating to slip.Instead, call the vendors first, and notify them of any potentialmissed payments-they might be willing to skip calling the banker.Later, when cash flow improves, reward these vendors by paying themearly.

Finally, if at all possible, stay away from credit cards as ameans of financing your business. According to Robert D. Manning,the author of Credit Card Nation (Basic Books), nearly 50percent of small businesses use credit card debt to build capital,but the cost of borrowing off credit card debt has risen sharplyover the past decade.