Having poor business credit can be crippling sometimes and can not only affect your chances of getting financing but could also prevent you from opening accounts with certain suppliers. The good news, however, is that there are things that you can do to improve your business’s credit rating, starting today. The best part is that some of these are pretty simple. If you want to build or improve your credit, here are some of the steps that you can take.
Know Your Credit Score
Did you know that the majority of American business owners have no idea what their business score is? It’s easy to assume that you have no or bad credit, but how would you know if you never saw your report?
If you want to know what it is, the first step is to go to Dun & Bradstreet, Experian Business, and Equifax Small Business and get your credit score. All of these will have different scores and ways to interpret them, so you should check these in detail so you can tell the exact credit health of your business.
Open Accounts
Contrary to what some people think, building credit is not about keeping your number of accounts small. Credit is really an indicator of economic activity, and the best way to show activity is to open accounts and treat them responsibly.
The first step is to open a bank account for your business, then get a business credit card. Know that there are cards out there that will allow you to put some money as collateral. Secured credit cards will use that money as the credit limit. You can then ask for the card to be converted to a regular card of the limit to be increased after a while, but only if you’ve been responsible with it.
You then want to open accounts with suppliers if you can. However, you want to make sure that they report the activity to credit bureaus or you won’t get any benefits.
Pay Early or on Time
One of the most important things when it comes to maintaining credit is to respect your payment schedule no matter what. Know that it can take only one late payment to significantly affect your credit score, so keep an eye on that. If you have a tendency to be forgetful, set up automatic payments. If you’re having trouble keeping up with payments, maybe there are some cash flow gaps that need to be filled.
Constantly Keep an Eye on Your Credit Report
While we know that you want to limit costs, you want to constantly keep an eye on your credit report. One mistake could affect you without even knowing it, and they have to be addressed immediately. This will also allow you to know exactly which steps need to be taken to improve your situation.
As you can see, building and maintaining your credit doesn’t have to be complicated. If you have the discipline and dedication needed with the right plan, you should be able to improve your credit situation over time.
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