How Small Businesses Can Improve Their Credit Score
Establishing and maintaining good credit can be a difficult hurdle for a growing small business, but it’s important that you make a concerted effort towards building your company’s credit score. Poor credit can hold your business back from realizing its full potential. If you want access to lending opportunities and good interest rates for taking out a line of credit or even just a credit card for purchases, you’ll need to have a good score working in your favor. Here are some simple but effective ways that you can get your business’ credit moving in the right direction.
Request a Copy of Your Score and Report
Your first step in raising your credit score has to be finding out where you stand. You can request a copy of your credit score from each reporting bureau. You should request both your business’ score as well as your own personal consumer score; a principal’s individual credit can have a strong influence on a business’ score while it’s still in its developmental phases. Requesting your own credit reports and scores is regarded as a “soft inquiry” about your credit won’t have any type of negative impact.
Monitor Your Credit Continuously and Correct Mistakes Promptly
Make it a point to review your credit report on a regular basis so that you can catch mistakes early. Look at each open line of credit on your report, and make sure that each tradeline is accurate. If you observe any type of mistake, you should report it as soon as reasonably possible. Don’t simply wait for erroneous entries to age off of the report because they could hold your score down for years.
Pay Your Credit Card Bills Consistently
Timely payments are a key component of a strong credit report. Be sure to make your payments on time every month, and try to pay more than the minimum required payment for cards with high interest rates. Ideally, you should try to pay credit as soon as it appreciates so you won’t have to pay avoidable interest charges.
Be Smart About How You Use Your Available Credit
Overutilization of credit can have a considerable effect on your credit score. If you’re consistently using more than half of your available credit and carrying high balances month to month, it’s bound to hurt your credit score. Try to keep your credit card utilization lower than thirty percent of what’s available to you. You might consider contacting your credit card companies to request an increase to your credit limit.