If your business credit score isn’t as high as you’d like it to be, there are steps you can take to improve it. You can’t fix your business credit score overnight, but as this article shows, you can easily raise it over time, making your business more attractive to lenders.
Step 1: Obtain Your Business Credit Report
Before trying to raise your score, it’s important to know where you stand. The three primary agencies that can provide this information via business credit reports are Dun & Bradstreet, Experian, and Equifax. Each company has their own method for assessing businesses, but among other factors, your business credit report will generally reflect your business’s history of credit usage, on-time or late payments, and size and age.
Your business credit report serves a pair of functions. First, it can let you see which factors are damaging your credit score. Second, if there are errors, you can see and dispute them.
Step 2: Make Payments on Time
On-time payments play a huge role in boosting your business credit score, while late payments can be very damaging. Setting up automatic payments is one way you can be sure to pay your bills on time.
Step 3: Wisely Use Credit
Though you don’t want to use up more credit than you can pay back, smart use of credit is another method for raising your business’s credit score. Consider obtaining multiple credit sources, such as a business line of credit, a business credit card, and a loan. However, keep the amount of debt you take on from each small so that you are still able to pay on time each month.
Your ability to responsibly use multiple credit sources will reflect well on your business’s creditworthiness. Additionally, if you have lots of available credit but use relatively little of it, your credit utilization ratio—another factor that goes into business credit scores—will remain healthy.
Be sure to check out Impact Commercial Capital’s other blog posts for more business-related tips.