5 Ways to Improve Your Business Credit Score

As your business starts to grow and take on more financial responsibility, it will begin to develop its own credit rating. Just like your personal credit score which is checked by lenders whenever you want to borrow money, your business’s score will work in much the same way, giving lenders a better idea of how responsible your company is likely to be when you borrow a business loan or take out a business credit card. Just like your personal credit rating, factors like late or missed payments can have a negative impact on your business credit, while on the other hand, making repayments on time and paying off your business debts will improve it. Here are some of the top things that you can do to improve your business’ credit score.

Make Repayments on Time

The best thing that you can do to improve your company’s credit score is to make any loan or credit card repayments on time. Your business credit is going to suffer even if you make a payment a few days late, so be sure to budget for when it is due and ensure that you have the cash flow available to make the payment. If you run into cash flow issues, there are several forms of lending that you might want to consider in order to ensure that you are able to repay your priority loans back, like invoice factoring or a merchant advance.

Be Wise with Your Business Credit Card

Just like your personal credit card, making too many purchases with your business credit card can have a serious impact on your business credit score. Lenders might be more reluctant to allow you to have another loan in the future if you already have a lot of business debt, so be wise when it comes to what you purchase using your business credit card. Only using it for essentials and emergencies is a wise strategy, and try to keep your balance under 50% of the limit at any one time.

Pay Your Bills on Time

Your business bills and expenses might also have an impact on your company’s credit score. Things like your utility bills and even your office lease payment might impact your credit score if you make these payments late or miss them.

Open Credit Accounts with Suppliers

If you work with the same suppliers on a regular basis, it might be worth establishing credit accounts with them so that you can increase the number of positive payments on your business’s credit file. When you’re going to be paying that to the supplier anyway, it makes sense to make the payments through a credit account so that it’s both easier to manage and contributes to good financial history for your company too.

Check Your Credit Score

Finally, stay up to date by regularly checking your business’s credit score so that you can stay in the loop with what’s going on there. If you see anything that doesn’t look right, you should dispute errors as quickly as possible to get them removed.

Your business credit score is essential to getting the funding you need and should be looked after in the same way you look after your personal credit rating.