Business credit scores are vital to the health of your business, including your ability to secure loans among other things. A good credit score is vital to your business’s success. Different agencies use different means to track your creditworthiness including things like your business’s number of trade experiences, outstanding balances, payment history, and more. These numbers range anywhere from 0 to 100, depending on your business’s past experience. The closer your business’s score is to 100, the better your credit will be.
Why Do You Want to Improve Your Business Credit Score?
Having a high business credit score helps your business secure opportunities for loans that you need to help improve, expand, and grow your business in the future. The higher your credit score is, the more money you will be allowed to borrow in the future. The businesses with the lowest credit scores may not be able to borrow any money at all.
The good news is that if you don’t have a great credit score, there are ways that you can quickly improve your score.
The Following Are Some Ways to Help Improve Your Credit Score:
Check Your Credit Report: Checking your credit report helps you know where you are at with major creditors and their reports. These creditors can include Dun & Bradstreet, Equifax, and Experian. These are the main creditors, but their reports are not always free. Sometimes you will have to pay to see your business’s credit report, but it’s always a necessary first step in figuring out where you stand with lenders.
Pay Your Bills on Time: Paying your bills on time shows that you are trustworthy and can be trusted to not spend more than you can pay for each month. It also shows that you are responsible enough to pay what you owe. The less of a debt risk you are, the more loans you are going to be able to take.
Decrease Your Credit Utilization Ratio: You ideally want to keep your debt to credit utilization ratio under 15%. For example, if you can borrow up to $100,000, you want to keep the amount of debt that you have at $15,000 or under to keep your credit score as high as possible. Be sure to pay off your balances on time and continuously increase your line of credit when possible to keep your debt credit utilization low and your profits as high as possible. To keep your credit utilization low, be sure to pay bills weekly or often as possible rather than once per month.
Establish Credit Accounts with Suppliers: If you find yourself working with the same suppliers time after time, be sure to establish credit histories with those buyers o that you can raise your credit scores higher.
Add Positive Payments Experiences to Your Credit Files: Sometimes vendors don’t share credit information with creditors, so you will need to report to creditors every quarter to share what improvements were made to your score. Hard inquiries will negatively affect your scores, whereas if you see something on your report that you don’t like you can report it for review.
Dispute Any Errors/Inquiries: Work with companies to help handle negative feedback. Be sure to report any negative feedback so that it’s removed from your credit score. Don’t leave unpaid accounts as they negatively affect your credit score. Dispute what should not be on your report to keep your credit scores high as possible.
“Pay For Delete” with Collections: Be sure to pay attention to any debts that go to collections to pay them off immediately. Otherwise, this will lower your business credit score and negatively affect your credit report. Otherwise, your debt history won’t improve as you are paying off previous loans and not current ones.
Considering that credit debt is vital to improving your business’s credit score, you want to ensure that you are doing all you can to keep your credit scores high as possible.
For more information on how to keep your credit score high, please feel free to contact us. We are here to help both you and your business succeed.