Checking your business’ credit score is vital, as it helps you know where your business stands in the eyes of both investors and credit finance companies. Recent research reveals that having a solid credit score makes your organization more trustworthy, making others more keen to work with you. So, if you’re eyeing some financing, like a loan or a new line of credit, improving that score is a smart move. Fortunately, you’re in good company, as this post offers a lowdown on six ways to boost your business credit score.
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Keep your business operations running
One of the major things people look at in your credit history, personal or business, is how long you’ve been operating. The longer you’ve been in business, the more it boosts your business credit score. Lenders love seeing that you’ve been at it for a while and consider it a green light for getting that loan you’re seeking. And if you want to start building a business credit score, you need to have a business credit report. If, for example, you’re freelancing or using your personal credit card for business expenses but not establishing a report with a business credit bureau, you might be missing out on building up some business credit.
2. Check your reports regularly
It’s worth noting that sometimes, credit bureaus can also slip up. So, be vigilant by occasionally reviewing your business credit score. It’s easier than scoring your personal credit report. Look it over for any blunders like fake inquiries or collections. Even a single wrong mark can affect your score. The good news is that fixing it is not a huge hassle. Each bureau might have its own report, so it’s smart to look at all of them a couple of times a year or before you go for a new credit. The goal is to keep your report squeaky clean.
3. Only apply for credit when necessary
Maintaining a healthy cash flow is crucial for a positive impression on credit reference agencies. Each time you seek credit, whether approval is granted or not, it leaves a trace on your credit report. Facing rejection for a loan could potentially impact your credit score. Furthermore, submitting multiple credit applications within a brief period may raise concerns at the credit agency. These credit inquiries are recorded, and an excessive number in a short timeframe might create the perception of financial struggles, potentially hindering your ability to secure funding. This is especially relevant when considering options such as Nav business credit cards.
4. Consistently meet your financial obligation
Early payments are gold stars on your report, showing you’re good at managing money and debt. Clearing those accounts before they’re due is prudent for your business. However, if you slip up and have a late payment hanging around on your record, it’s there for six solid years, which is a long time. Keeping your financial commitments in check not only beefs up your credit score but also impresses potential inventors.
Meanwhile, as a business, it helps to be well-informed about fund obligation management, especially if people have invested in your business, as it can positively impact your credit ratings. It reflects your business’s ability to meet its commitments, boosting investor confidence and trust in the company’s financial health.
5. Pay for Delete Collection
If you have debts in collections, be smart about paying them off. Ensure the collection agency agrees to wipe out that negative mark from your credit report. You have to ask for it – or else, paying up won’t improve your credit score. You need the black mark gone to see a real score boost. If the agency won’t offer the pay for delete option, and you’re aiming to improve your score, you might want to rethink paying it off. It will still dent your score whether you pay up or not.
6. Start a new credit line
If you’re looking to boost your credit use, there are two ways to do it. Paying off your debt is one, and the other is to get yourself more credit to work with. Starting a business line of credit is a smart way to up your credit limit without shelling out extra cash. The beauty of it is that it can stay there, untouched, without any charges stacking up. But having it ready in your back pocket does wonders for your business credit score. Also, having a mix of credit types is a win. Think term loans, invoice accounts, and different credit cards. Show those credit bureaus you’re an expert at handling all sorts of credit responsibly.
