Business credit is often overlooked for people starting a business. They know that they have a personal credit score, but business scores aren’t talked about as much. That means that many business owners don’t even know about them.
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The question is, are there any ways to improve the credit score for your business?
Improving business credit scores is an essential part of improving your company’s chances of getting financial help. Keep reading to learn several business credit score tips that will help you raise your score.
Check Your Report for Errors
Even if you do a great job maintaining your business credit, that doesn’t mean that errors will never happen. Sometimes vendors and financial institutions will get things wrong and put an inaccurate claim on your business credit report. This can happen because of bad data entry or incorrect information getting to the financial people at a company.
Your score will drop when this happens. By regularly checking your credit report, you can look for these errors and make sure they get resolved.
Use Credit Lines With Vendors
You don’t have to pay cash for all your vendor purchases. In most cases, vendors will provide you with a credit line to use. Each one of these credit lines will increase your credit and add an account to your credit history.
The more aged credit lines you have as a business, the better. Showing a history of on-time payments with aged accounts will help you improve your business credit score.
Reduce Your Credit Utilization
While having large credit lines is nice, you don’t want to fully use all your credit Lenders want to know that you will pay off your loans and credit, so the last thing they want to see is a high credit utilization rate.
It doesn’t matter if you’re trying to learn how does an SBA loan work or looking for equipment financing. The amount of credit you currently use matters.
Get your credit utilization as low as possible. If you keep it low for extended periods, it will improve your credit score.
It’s not uncommon for businesses to end up in collections in some cases. Cash flow isn’t easy, and companies sometimes go without making their payments.
However, catching up on what you owe won’t remove the collections notice in your credit report. You’ll need to ask your lenders directly to remove the collection. If they don’t, it will continue to negatively impact your score even if you pay the debt.
Now You’re Ready to Improve Your Business Credit Scores
When so many business owners don’t realize that their business has a credit score, it isn’t uncommon for companies to try to get financing and can’t because of their scores. However, now that you know what it takes to improve business credit scores, you’re ready to take action to improve your company’s financial standing.
Do you want to learn more tips that will help you improve your company’s financial standing? Check out the latest articles to learn more.