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3 Easy Ways to Improve Your Business Credit

invoice with a pen on itAs a business owner, you understand the importance of having good credit. When your business struggles with late or slow payments from clients, your credit can suffer.

Many, if not all, business owners have accumulated debt at some point in their career. Rather than let that debt take a toll on your business’s credit, it is important to take strides to improve it.

How do I improve my business’s credit?

We are going to discuss three steps that your business can take to improve its credit.

1. Establish Credit

In order for your business to establish credit, it must be established as a legal entity. This will help differentiate your business’ credit from your own, personal credit. As you may not know, the scale of scoring is different from business owners to people. Businesses Experian score ranges from 0 to 100 and business FICO scores range from 0 to 300.

When your business has been claimed as a legal entity, it’s time to establish credit. Some things that can help your business build positive credit are:

  • Debt to Income
  • Payment History
  • Length of Payment History
  • Utilization
  • Business Data
  • By starting your business with prompt payment, a healthy debt to income ratio, and accessible business data, you will start to gain a strong credit score that will set up your business for a bright future.

    2. Build Strong Credit

    Building strong credit for your business takes work, but is crucial for its success in the long run. To start building strong credit, you need to adapt on the above elements. You can do this by:

    • Checking current score
    • Incorporate Your Company
    • Establish an EIN
    • Open a business bank account
    • Open a business credit card and get your vendors/suppliers
    • reporting to establish lines of credit on your business’s name

    To have a stellar business credit score, you need to pay early, rather than paying by the due date like with personal credit scores.

    3. Maintain Credit

    It is important that you constantly check and monitor your credit. You should check all of your business accounts regularly, dispute if you notice and discrepancies within them, and always ensure that at least 4 of your credit and trade lines are reported.

    These are a few of the most important things that you need to ask yourself in order to maintain your good credit:

    • Do I pay my bills on time?
    • How much available credit do I have on credit cards and bank lines?
    • How long is my credit profile?
    • How many times have I inquired about my credit profile?
    • What are my revenues?
    • How many employees do I have?

    By asking yourself these questions about your business, you will be able to carefully check where your money is and what it is being spent on. This will help you secure your business’s capital to maintain your solid credit.

    It is also crucial that you check your FICO score to see if you qualify for a business loan. Obtaining a business loan is a great way to take your business to the next level. A bank or business loan company will look into your past business and personal credit to make the decision of lending to you, how much they will lend, and at what price.

    Get started now. Apply online
    Or call us anytime 24/7 at 800-672-3844.

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    About the Author:

    Since 1991 I specialize in Invoice Factoring, PO financing and ABL facilities. I currently work internationally with companies in the US and Canada via our internet marketing division. Specialties: Accounts Receivable Factoring and Payroll Funding for Manufacturing, Oil & Gas, Telecommunications, Wholesale Trade Distribution, Staffing and Transportation. I always enjoy helping companies rise to the next level of success.

    View More Posts By Robert Bernfeld