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Boost Your Business Credit Score

A good credit score will benefit your business by making it easier to land contracts and ensure that you get better terms from both lenders and suppliers.  This is why making sure that your business is in good financial health is vital, especially in the current uncertain economic climate.  Today we’re going to take a look at some simple things that you can do, as a small business owner, to make sure that your business credit score is looking healthy.

  • Pay Early or on Time – Yes, we do mean this – if at all possible pay your bills early or at least pay them on time as this will help you to build good credit scores for your business.  Whether the bills are from your suppliers or utility companies, these are some of the bills that are used to determine your business’s credit score so paying on time really is essential.  However, you may be unaware that paying early can speed up how quickly you improve your credit score.  Paying your suppliers on time (or early) puts you in a great position when it comes to future negotiations.  Ask your suppliers if they offer discounts for early payment and, if so, make sure you pay these bills early as a way of reducing future costs.
  • Get a Business Credit Card – and pay it in full each month.  The more accounts you have that can be used to determine your credit score, the better, as long as your accounts show positive payment experiences.  If you do apply for a business credit card, no doubt you will also benefit from the rewards offered by the financial institution issuing the card so this tip is well worth following.
  • Open Trade Accounts with your Suppliers – Paying your business bills on time or early won’t have much of an effect on your business credit score if the payments you make aren’t being reported to business credit reporting agencies.  To establish a credit history for your business you’ll need to make sure that the accounts are reported.  A life of credit with a supplier can be a great place to start.  If you already have trade accounts, then make sure that the suppliers report to business credit agencies.  If you can establish a positive payment history with several suppliers that do report to business credit agencies, then you’re likely to see your business credit score rise.
  • Check Your Credit Reports – and do a bit of damage limitation.  It may surprise you to know that a massive 25% of business owners who checked their credit reports discovered inaccuracies that had lowered their credit scores.  This means that you need to check every item in your credit reports, particularly anything that is having a negative effect.  If you do discover any mistakes you may need to file a dispute with the credit agency in order to rectify this and improve your credit score.

Keeping on top of your credit scores and making sure they are accurate can only have a positive effect on your business – it doesn’t take long to do this once you get started and it will pay you in the long term.