Credit scores aren’t just for people – businesses are also assigned credit scores that indicate their financial health. Just as a low personal credit score can severely inhibit your financial opportunities, a low business credit score can make life difficult for your business. Here are three tips for improving your business credit score.
Check Your Credit Report
Before you can begin working on improving your business credit score, you need to first establish exactly what your score is. Fortunately, it is easy to check your business’s credit score. You can use the same agencies that you use to check your personal credit report. Unfortunately, you will need to pay a fee for your report as the owner of the business. However, this step is essential if you want to begin reducing your score.
Once you have your score, you will then know what you are working with and how far you have to go. Now you have your credit score in front of you, this article about business credit scores from Advance Point Capital will explain what your score means and how it’s calculated.
Make Sure You Pay Your Bills On Time
Perhaps the simplest thing you can do to help your credit score stay as high as possible is to make sure that you are paying all of your bills and meeting any other repayment obligations that you have. Whenever you miss a payment, you risk causing lasting damage to your credit score. If you aren’t able to stay on top of your financial commitments, you should speak to your creditors about implementing a more manageable payment schedule.
As long as you keep up with repayments on any money that your business owes, you should be able to keep your credit score high with relative ease. Never take on any new debt if you are uncertain of how you will pay it back, this is the kind of thing that is going to end up harming your credit score in the future.
Pay Attention To Your Utilization Ratio
One of the most important factors that credit reporting agencies look at when they are calculating your score is the ratio of the amount of credit you have used to the amount that you have available in total. Ideally, you want to keep this ratio beneath 15%.
There are lots of things that you can do to improve your credit ratio – paying off any balances when you can afford to, increasing your credit limit, reducing the amount that you are spending on credit cards, opening up other new lines of credit, and making sure that you pay all of your bills as soon as possible will all help to improve your credit utilization ratio.
Like people, businesses are dependent upon a good credit score in order to access many of the financial services that they need. Fortunately, it is easy for any business to check their current credit rating and take immediate steps to begin improving it. If you can get into the habit of paying off any bills or debts that you have as soon as possible and minimizing the amount of new debt that you are taking on, you should be able to maintain a high business credit score without too much effort.