Improve Your Business Credit Score with These Tips
Start-ups and first time entrepreneurs might not understand the value of building business credit, or how to build business credit. A Business credit line is important because it enables you to get funding for expanding and developing your business. Throughout the life of a company, the need to establish business credit will most likely arise. You should try to build credit before your company needs it.
A good business credit score will also benefit a business that needs an emergency business loan. If you’re equipment breaks or if you need the cash quickly to complete a project, having a good business credit score will help you get approved for a small business loan. Generally, if you want to get a loan with a good rate, you must have a fairly decent credit score.
Here are some tips on how to improve your business credit score:
Keep a positive payment history
One of the main things you can do to establish good business credit is to pay your business loans and credit card bills on time. Having a good history of consistent and timely repayment on your existing debt helps you build trust with future creditors. While late payments by a few days likely won’t impact your score negatively, it’s a good habit to get into making all payments before the due date. Plus, it will also help you avoid late fees and growing interest fees.
Pay off your debts as fast as possible
Paying off your debt fast is key to building good business credit. High debt levels mean your business has less breathing room if revenues and profits decrease. One way to keep your outstanding balances low is to make multiple payments per month, instead of waiting until you’ve reached the end of the month.
Ask to increase the credit available
Getting your credit limit increased could also help your business’ credit score. Asking your creditor for an increase on your credit limit could give your score a quick boost. The lower the percentage of your credit you use, the better your score will be.
Ask vendors to report business credit history
Make sure at least some of your suppliers report your transactions to the business credit bureaus. Vendors have no legal obligation to report this information to business credit bureaus. So, if it’s a smaller supplier, they may not report the information at all. If you want to establish credit, it’s up to you to make sure the supplier you work with reports your transaction information to the business credit bureaus.
Want to learn more about how to build business credit?
Register today for NCH’s free webinar: How to Build Lines of Business Credit Rapidly. Learn how to quickly build lines of business credit with a FREE webinar hosted by Founder and President of Nevada Corporate Headquarters, Cort Christie. Joining Mr. Christie will be business credit guru and coach, Mike McNichols.
What: Free Webinar: How to Build Lines of Business Credit
When: May 26, 2016
Time: 1 p.m. PST
Cort Christie will be discussing the basics of building business credit, how business credit scores are calculated, and why your business needs to start building credit early. This webinar is a great opportunity for new and experienced business owners to learn more about establishing and maintaining business credit.
BONUS: All webinar attendees will receive a digital copy of NCH’s Fast Money Guide. In this guide, you’ll learn more than 77 ways to raise money fast for your business!