How to Increase Your Business Credit Score
Having a good business credit score is essential for any business to succeed. It affects your ability to get loans and other forms of financing, as well as your reputation with vendors and suppliers. Unfortunately, many small businesses don’t know the best ways to improve their scores. Fortunately, there are several steps you can take that will help you build a better credit history and improve your score over time. In this blog post, we’ll discuss how to go about improving your business credit score so that you can have access to more opportunities for growth and success.
Pay Bills on Time
The first step in improving your business credit score is to pay all of your bills on time. Payment history makes up 35% of your overall business credit score, so you must establish a pattern of on-time payments to vendors and lenders. If you make late payments, this could hurt your score, so make sure to stay on top of your debts.
Be Mindful of How You Use Credit
Another important factor in improving your business credit score is making sure that you’re not using too much of your available credit. The amount of debt you have relative to the total amount of available credit is called the “credit utilization ratio” and accounts for 30% of your score. It’s best to keep your credit utilization ratio below 30%, meaning you should avoid taking out more loans than you can reasonably afford to pay back.
Stay on Top of Your Business Credit Report
Finally, you must monitor your credit report regularly and address any errors or problems immediately. You are entitled by law to receive a free copy of your credit report every 12 months, so take advantage of this and review it thoroughly. If you notice any inaccurate information or discrepancies, contact the relevant credit bureau and dispute it right away.
By taking these steps, you will be well on your way to improving your business credit score and reaping the rewards in terms of increased access to financing and better deals with vendors and suppliers.