How to Improve your Business Credit Score
Getting funding for your business is an essential part of running one, especially if your business is relatively new or about to expand. Getting a loan can help you put money aside in case you need it for unforeseen circumstances like equipment repairs or upgrades, or long downtimes in production due to weather or other problems. However, to get the best deals on funding, it is important to make sure that you have a good business credit score. Here are some ways to improve that score.
One way to improve your score is to make sure that you have open lines of credit for your business. This is very similar to personal lines of credit, but it is not exactly the same. You may run into a snag here if you are a new business, because sometimes to get loans you need to have established credit. In this case, a lender may look more into your personal finances to decide whether or not to approve you for a loan or business card. You may also be stuck with a less-than-desirable interest rate or a low loan amount for your first line of credit, as well, since you will be considered higher risk.
Once you have your lines of credit, you want to make sure that you are paying on time. Make at least the minimum amount due on time or early, and if you have the revenue to spare, start paying above the minimum. This will help increase your available credit and keep your credit utilization low.
Another way to improve your business credit score is to know how they are calculated. Every major credit bureau follows different guidelines when it comes to businesses, so make sure that you know exactly what each bureau looks at so that you can use that information to improve your score. You also want to make sure you are checking your score at least yearly, although unlike personal credit scores, you have to pay for business score reports.
If you have an accountant, now would be a good time to utilize them to help you improve your business credit score. Their job is to keep track of how your company is doing financially, and they can help you get your score up. A financial advisor is also capable of doing the same thing. If you are ready to improve your score and get better business opportunities, start researching ways to increase your score and talk to a financial professional today.