When you have a business and you are just starting out, or you have been in business for a while, you want to make sure your business credit is good. Just like it is with your personal credit, there are things that you can do to help your business credit.
Below are 4 tips that you can use to help the credit for your business be in good standing.
Be Sure You’re Paying on Time
One of the biggest things that can affect your score is making late payments. So, when you want to increase the credit score of your business, you want to make sure you’re paying suppliers, lenders, and creditors in a timely manner. This will also be noted on the company credit report.
Choose Suppliers Who Share Payment Data with Agencies
Paying on time isn’t going to do you much good if you aren’t using suppliers who are reporting to the credit agencies for businesses. This is another huge area that you should look into when you choose your supplier. A lot of small businesses will suffer from credit reports that are incomplete because a lot of suppliers and creditors don’t report the payments that they make.
Don’t Use A lot of Business Credit
If you didn’t already get a business loan, chances are that you are trying to figure out to do it. After you have a well-established business so that you don’t have to rely on loans, it’s a good idea to invest money into your business rather than taking more loans. You also shouldn’t use up all of your credit that you have. You want to keep your CUR, or credit utilization ratio, down.
When you use less credit from what has been given, you are going to have a higher credit score. This will show that you have a financially stable business that doesn’t depend on loans and credit. When you’re maxed out and overextended on credit, lenders see the company as cash strapped.
Separate Business & Personal Credit
Finally, it’s a good idea to separate your personal credit and your business credit. This is going to help with minimizing the impact they’re going to have on one another. For instance, if you are having trouble with your finances personally, it shouldn’t interfere with the credit report for your business.
These are four things that you can do to help the credit score of your business to be higher. We thank you for taking the time to read our blog and we hope that you will come back often to see what new tips and tricks we have to offer.