Credit in life is one of the most important things you can acquire. Having a good financial credit score can get you a low interest rate when buying a house, get you a much-needed loan for your business, and possibly save you hundreds of dollars a month when buying a new car.

Your credit is carefully tracked through the three big credit agencies which are Experian, TransUnion, and Equifax, and it takes a history of years of on-time payments to get a good score. If you are at 720 or above, you can virtually get any loan you want, and at a great interest rate.

However the “credit” I am going to talk about in this post has nothing to do with big credit bureaus or actual scores and has everything to do with being open, honest, stand-up, and reliable. Life credit is a word I coined two years ago. In a nutshell, life credit is the slack, breaks, and opportunities that people give you based upon their history in dealing with you on all levels.

My accountant (who I have been working with for over eight years now) was introduced to me via someone from Paychex (the payroll company). When I first met him, I didn’t have much money at all, but I knew I was going to be successful. I needed him to do a tax return for my L.L.C, but he was a bit more than I could afford. I told him in our first meeting that I didn’t have a lot of money, but that I worked hard and I was very trustworthy. I asked him to break up the payments for me over a period of time so that it didn’t have to come out-of-pocket all at once. He agreed, and that is how our relationship started. You see, it’s not like he was selling me a house or a car–he was selling me his time. If he did some work for me and I never paid him, it would suck, but it’s not like he couldn’t recover from the loss. The chances that I would stick to my word and become a good customer for life far outweighed the possibility that I would take off and never pay him, and so my life credit with him began.

As a small business owner, one of the most important things is cash flow. We all have to spend money on big-ticket items once in a while. Time (in this case) is the small business owner’s friend, and good money management skills are what make a successful businessman. Convincing someone to trust that you will pay them back over time is only the first step in earning life credit. You need to back up this trust by coming through on your word. If I set up a payment plan and promised my accountant that he would have his payment on the 15th, I would get it to him by the 14th or personally drive it to his office the day it was due.

I practice going the extra mile in my life. When you have lots of deals like this spinning, you need to go above and beyond what you would normally do. Make phone calls letting people know things are going well and that the payment will be on time. Send the payment via FedEx and email them the tracking number. Send them a follow-up email or letter thanking them for allowing you to spread out your payments. Buy them a small gift card on amazon.com. Go above and beyond what they would ever expect and literally blow them out of the water with how on top of things you are. The one thing you never want to do is not come through on your word. Do whatever it takes to uphold your promise, even if it means personal sacrifice. If something comes up in your life and you are having trouble meeting your obligation, don’t run away from it. So many people start to blame events that are out of their control and get in the, “Screw everyone, I need to take care of myself and my family” mentality. That is the wrong attitude. Your word is one of the only things you always have, and once that is gone, so goes your life credit. Even one mistake can cause someone to bad-mouth you to other people who may end up playing a big role in your life. There have been times when a client has felt cheated because something didn’t go right. I know I would never cheat anyone in a million years, so I did everything I could to show this to the client, even when I thought that he was wrong. I bit the bullet and wrote an apology letter and even gave him his money back during tough financial times when I really needed the money.

I cannot tell you how important life credit is, and it has nothing to do with a score and everything to do with your character. Good life credit has gotten me personal loans from friends and family, excellent accounting and legal work during tough financial times, and has secured office space simply on my word. Like real credit, life credit needs to be earned over time, and the only way it works is when you say what you mean and mean what you say. It’s that extra mile that blows people away and gains their trust.

Thanks, Alan, for believing in me when I had holes in my jeans, and no, they weren’t designer.

For a great CPA, contact Alan Melcher of Goldman & Melcher, 818-710-1133.

See, now there is his life credit coming back to him.