5 Stages to Better Business Credit

When you own a business, you will likely need to take out a loan at some point. Loans can be highly beneficial to get the property you want to purchase or obtain materials you need at this point in time but cannot afford them on your own currently. However, in order to get a loan, you are going to need to show that you have great business credit. If you have poor or even just fair credit, there are certain things you can do to enhance it.

 

The first and most basic thing you can do is pay off all of your debts on time. If you have a company credit card, pay off everything from one month to the next. If you owe another company some money for some supplies they provided you, make sure they get paid off immediately. Additionally, pay off any debts before the deadline rather than waiting until the very last minute.

 

In the event you are able to get a loan, then work with a lender that communicates with credit bureaus. This is the second way you can improve your credit score. Once you pay that loan off, the lender should tell the credit bureau about it, and that will make your credit rating go up.

 

Third, you should check your business credit score from time to time. The reason for this is that errors can occur at any of the Big Three institutions. Most of the time, these errors are no fault of your own, but they can really inconvenience you if you attempt to get a loan. Review your credit rating from time to time to make sure all three of your scores are pretty much the same.

 

You can also work with your suppliers about speaking with credit bureaus. For example, if you purchase supplies from someone regularly and always pay off the debt within a timely manner, then your supplier can relay that information to bureaus to improve your rating. Setting up these trade lines can be a great resource.

 

Finally, the last thing you can do to maintain a good business credit rating is to keep your public records clean. This means you want to operate ethically and efficiently. A good credit score is not going to mean as much to a lender if you also have several bankruptcies or liens against your business. When it comes to giving out loans, banks consider pretty much every aspect of your business, so nothing can be overlooked.

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