Ways to improve your business credit score
Building your business credit score is very important and Peach Capital Funding will explain why you need to build your business credit.
In business, a company does not have a consumer credit score. Instead, it has a business credit score maintained and calculated by business credit reporting companies.
Most small business owners do not know there is such a thing as a business credit score for a business and therefore lose opportunities to improve their business with business loan options to help their business grow and to help their business credit growth as well.
Small business owners make the mistake of assuming that a good personal credit score will be enough to obtain good business credit and a loan for their business.
Here is some reasons small business owners should start building business credit score.
Small Business Financing: Lenders and business equipment suppliers use business credit to judge your creditworthiness of a business. If a company’s business credit rating is high, lenders and suppliers will give great loan terms to purchase on business credit.
How to improve your business credit score
1. Make Payments On Time
The more days a company pays sooner than the loan terms the greater the impact it will have on its business credit score.
2. Add Positive Trade References
Adding positive payment experiences that your company has with suppliers, vendors, or business partners will have a positive impact to your business credit ratings and scores.
3. Improve Credit Utilization
A company’s credit utilization is the most important factor in what credit scoring models use to calculate business credit ratings. Lenders view a business with a high utilization rate as a high risk of not being able to repay its debts on time and therefore you may not get a loan or terms that work for your business.
4. Increase Your Credit Limit
Increasing your credit limits is one strategy you can implement. Usually after the first six months of opening a credit account you can request a credit limit increase.
5. Keep Your Business Profile Up-to-Date
Your business profile contain your company’s banking and payment data, it also contains critical information that other businesses, suppliers, and lenders use when deciding whether to give you business credit.
No one knows your business better than you so it’s essential that your business profile is accurate.
Improving your business credit scores and ratings is one of the most important steps you can take as a small business owner. Doing this will enable your business to maximize its funding potential and obtain the best possible business loan to help you expand your business.
Peach Capital Funding is here to help you with your business credit score and we are here to help you fix your business credit so that you can receive a great business loan for your company to grow.