Whether you’ve lived here all your life, you’re an expat who just arrived, or you’re a small business trying to become a big business, you need to be prepared for those occasional unpredictable events that life brings. Whether it’s illness, injury, or a once-in-a-lifetime business opportunity, you don’t want to be caught without access to the money you need. In addition to a solid savings plan, having ample credit available to you is crucial to being ready for those instances when money isn’t readily on hand. In my experience, however, many people and companies don’t prepare for this inevitable circumstance, and then find themselves frantically begging for cash from friends and family. Don’t let this happen to you.
Obviously, paying your bills promptly is basic to this strategy. What if money’s tight and you can’t quite pay all the bills on time, though? If you’re a business, the most important thing to do is to make sure to pay the tax man right away. While in other countries the government can be paid late (as they report delinquent payments later than other creditors), in Korea, payments not made to the government will be the first ones to damage your credit rating. Any tardy government payments will be reported to all financial institutions, while other late payment records will typically be kept as internal records for individual banks or creditors. Don’t be late on your VAT or other payments that need to be made to the government. Find something else to delay payment on.
Next, have ample credit cards available to you and/or your company and use them for every payment possible. Don’t pay with cash when a credit card will do. If you do that and you have more credit available than you use every month, then you’ll be growing that credit for the future when you need it available to you.
Talk to your current bank about getting a credit card. They’re the place to start, as you already have a credit history with them. If they give you trouble, there are plenty of other banks that specializing in providing a wide variety of credit cards, particularly to foreigners: Shinhan Bank and IBK Bank are some great places to start.
For all your accounting needs, email me at email@example.com. I’m happy to help.