How To Protect and Improve Your Business Credit Score

One of the most important things to take care of for all businesses is your company’s credit rating. Great credit can help you qualify for better interest rates and higher capital amounts. It can make it easier to get the equipment you need or purchase inventory at the best prices. The following tips are designed to keep your business credit score in excellent condition:

Ways To Protect Your Business Credit Score

It’s easier to build an awesome credit history from the beginning than it is to repair poor credit after the fact. Here are a few suggestions:

  • Minimize your total debt: Credit agencies often consider your total credit utilization when calculating your credit score. If you qualify for a revolving business line of credit, don’t max out your available funds. It’s a good idea to aim for an amount of 30% or below. For example, if you’re qualified for $20,000, limit your debt to no more than $6,500. If you need to take out more than that for a business emergency, use invoice factoring or customer payments to get the debt below 30%.
  • Pay on time, every time: One of the biggest factors that impact your business credit score is how promptly you make payments. If you pay your suppliers on time and always stay up-to-date with your business credit card, it can have a fantastic effect on your rating.
  • Open a few credit accounts: Don’t let fear over poor credit keep you from applying for a loan or business credit card. To assign you a positive rating, credit agencies need to see how you administer the money. In other words, no credit rating may as well be a poor credit rating as far as lenders are concerned. Open an account and make payments promptly.

Don’t get us wrong, there are still ways to recuperate from a less-than-optimal score. However, protecting your rating in the first place is the best way to enjoy a trustworthy reputation with lenders.

How To Rebuild Damaged Credit

What if your business made some unwise choices and already has poor credit? Follow these steps to make it back:

  1. Calculate how to repay debts as quickly and consistently as possible.
  2. Avoid taking on loans with high risk or high-interest rates.
  3. Separate your business and personal finances.
  4. Use a secured loan with collateral to maintain cash flow.
  5. Use equipment leasing for essential business equipment.

It can take a while, but recovering your credit score is definitely possible. You may even be able to negotiate directly with lenders to remove negative marks on your history. This can reduce your total debt and improve your business credit rating.


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