Your business credit score can be an asset or an obstacle. Good credit makes it easier to get loans with favorable terms while bad credit can keep you from qualifying for funding at all. If you have a low credit score as a result of past financial problems, or you don’t have much credit history, there are some steps you can take to boost your credit.
1. Use Your Credit
While it may seem counterintuitive, as long as you are doing so responsibly, it is better to use your credit. This allows you to build up a credit history which will show potential lenders that you are responsible for the funding you are given.
2. Make Your Payments On Time
One of the easiest ways to improve your credit is to simply make your monthly payments on time. This applies to any credit cards you have as well as other types of payments. If you can, paying your bills early can be more beneficial than paying them on the exact date they are due.
3. Open a New Credit Account
If you have had trouble with debt, it might seem like a bad idea to open another account. However, increasing the amount of credit you have available will lower your debt-to-credit ratio. Having a low ratio will improve your business credit score. If you decide to use this method, be sure not to use up all of your credit as that will get you right back where you started.
4. Set Up Credit With Your Vendors
Some vendors may report your payments to the credit bureaus. If you tend to work with the same suppliers regularly, then it might be in your best interest to set up a line of credit with them. Not only will this help improve your credit, but it can also make it easier for you to get the supplies, products, and services that you need consistently.
5. Regularly Check Your Credit Reports
In some cases, a decreasing credit score may not be your fault. If someone else is using your credit or someone has made a mistake, this could affect your score. Look over your credit reports at least once or twice a year to make sure that everything is correct. If you notice any problems, report them right away.
Because your business credit score can affect your ability to get loans and additional financing when you need it, you should do what you can to improve it as much as possible. Taking these simple steps will help.