When was the last time you checked your business’s credit score? Securing financing is a crucial part of building a business. Just like individuals, businesses need to maintain their credit score to get future financing. Many types of commercial loans require a credit check. If your business’s credit score is less than perfect, there are ways to improve it. Keep reading to learn how to repair your credit so you can get the best commercial loan rates.
How to Improve Your Commercial Credit Score
Many business owners do not know how to improve their credit. Just as there are a variety of methods to raise your personal credit score, there are a variety of methods to raise your business credit rating. These methods can be divided into two categories: do it yourself and via a firm.
Do it Yourself
The primary avenue for boosting your credit score is by doing it yourself. Many credit problems can be resolved by modifying spending and paying attention to payment dates and credit balance. There are several techniques you can use to improve your score yourself:
– Make Payments on Time
The first and perhaps most important way to improve your business’s credit score is to pay existing bills on time. Most businesses have loans, but some business owners fall into the habit of making late payments. Not only can this damage your credit score, but late payments can also hurt your relationship with your creditors. Their decision of whether to provide further lines of credit might hinge on your payment history.
It is crucial to pay the bills prior to their due date to maintain good credit. If you have made late payments in the past, each on-time payment you make going forward will also help pick up those credit score losses.
– Keep an Eye on Your Credit Score
Just like your personal credit score, you should be checking up on your business credit score regularly. There are multiple services available to monitor your credit without affecting the score. Use these options to your advantage.
-Correct Errors on Your Commercial Credit Report
The possibility of errors appearing on your credit report is the main reason you should be checking your credit regularly. Something as simple as an incorrect address can impact your business’s credit. Make sure to dispute any errors you find right away.
-Maintain Lines of Credit
It can be tempting to avoid using credit altogether if you’re worried about your business credit score. However, you need to use credit to build credit.
If you have been able to build your business without loans, you might run into the problem of having little to no credit history if you decide to apply for major financing in the future. By opening a small line of credit that you pay on time, you can establish your business’s credit history and raise its credit score. The sooner you establish credit, the better off you will be in the future when you apply for larger commercial loans.
If you do currently have commercial credit accounts, like most business owners, strive to keep credit usage low. Simply having the option to use more credit shows creditors that you are responsible with your business’s money and helps raise your credit score. If needed, pay down your business debt as much as possible. However, refrain from closing your accounts once they are paid off. The age of your credit lines is another factor in determining your credit score, as well as the number of accounts you have open.
Via a Firm
Most business owners have a lot on their plate. Worrying about your credit is sometimes not an option when you are busy running your business. If this is the case, you have the option of hiring a credit repair firm.
A credit repair company will work on your credit for you by interfacing with your creditors and the credit reporting bureaus in your stead. If you decide to take this route to it is imperative that you use a reputable credit repair provider.
Legitimate credit repair firms will not require you to pay upfront. In fact, they must legally wait at least six months before they can charge for services rendered. Be on the lookout for claims of quick credit repair guarantees and companies that attempt to hide information as well. Make sure to ask the company you are considering specifically how they plan to improve your credit. A legitimate credit repair company will readily offer this information and will be upfront about the fact that credit repair can take time. They will also not use illegal means of manufacturing a high credit score such as creating a new business credit identity.
Your business credit score is an important factor to maintain to obtain the best commercial loan rates. If your commercial credit is lacking, there are multiple ways to improve it either yourself or through a credit repair firm. However, even with a high credit score, it can sometimes be challenging to find the best financing for your business. Contact one of our experienced brokers to ensure you’re getting the best commercial loan rates possible.