Where to Start When Attempting to Improve Your Business Credit Score
If your business credit score leaves much to be desired, it could be holding your business back. Not only do loan applications rely on your score, you’ll have a harder time applying for nearly any form of financing. Start today with these helpful tips for improving your business score.
Just like your personal score, your business has credit that is given a score. However, a business score is between one and 100. Higher scores are better than lower scores, so a perfect business score would be 100. This not only allows you to become approved for business loans, it can also affect the loan amount, interest rate and payment plan.
The first step to improving your credit score is to find out where you are now. It’s hard to see signs of improvement if you don’t have a clear starting point. Unlike personal credit, you won’t receive an annual free score for your business, so you’ll have to invest in a report from one of the major reporting companies.
Overdue payments is one of the major ways your score may be struggling. Whether it’s a business credit card or a commercial mortgage, timely payments can build your score and keep your finances in check. Next, work to gain more available credit than you’re utilizing. Just like personal credit, your business score will increase if you decrease your credit utilization ratio. Whether you sign up for a new credit card or simply pay off your balance, your goal should be less than 15 percent usage.
A great way to decrease your credit utilization ratio is to establish positive payment relations with your suppliers. By creating a credit account with a supplier and making timely payments, you’ll boost your credit and improve your relationship with your suppliers. If you don’t work with any suppliers who have credit accounts, you can still add references to your business credit account.
Finally, there’s a few ways to still redeem your credit score even after negative feedback. First, there may be errors on your account. Verify any negative feedback is true. Otherwise, you may be able to remove these errors from your account and improve your credit. Some agencies also allow you to pay to quickly remove items from your credit history. Not only will paying off your debts improve your score, collectors can actually remove negative feedback from your history. This isn’t always an option, so make sure to ask for it specifically in order to help improve your score.