5 Steps to Business Credit Success
When your company needs money, the worst thing is to get denied for a loan. You can improve your chances of getting approved with minimal hassle if the bank sees you have a good business credit rating. Similarly to a personal credit score, a business score shows that your company has a good history of avoiding debt and making payments to creditors on time. You need to work on increasing this score from the moment your business opens, and there are a few ways to accomplish that.
- Keep Public Records Clean
Liens, judgments and bankruptcies all reflect negatively on your company. Additionally, all of these are on the public record, meaning anyone can see them. When a credit bureau catches wind of any of these items against your business, your rating will drop. For a bankruptcy, your score will be affected for at least 10 years.
- Borrow From Lenders That Provide Information to Credit Bureaus
For your business credit score to go up, the credit bureaus need to know you paid back loans in a timely manner. Therefore, you only want to work with lenders that report directly to bureaus. Most banks do this, so you will not have to worry with them. However, if you attempt to get a small business loan from an alternative lending source, then you should definitely ask before taking out a loan.
- Work With Suppliers That Report to Credit Bureaus
Similarly, you want to ask your third-party suppliers if they provide information to the main three credit bureaus. Regardless of the industry you are in, you will require bulk supplies and inventory. Most of the time, you simply need to ask if the supplier can report to an agency.
- Pay Off Creditors on Time
From credit card bills to utility companies, you want to pay all your bills on time. This is an easy way to build up a score. Additionally, you should maintain a low credit utilization on any company credit cards you have.
- Check in With Credit Bureaus Routinely
Credit bureaus have been known to make mistakes from time to time. Check your business credit score regularly to make sure it is accurate. In the event something is wrong, then you want to bring it to the attention of the bureau immediately. You need to correct this before you go seeking a loan. The main bureaus are Experian, Equifax and Dun & Bradstreet, and it is easy to check a rating.
