A good business credit score is not only important, but a vital component for a company’s success and sustainability. Anyone with an open business and any type of a credit already has a matching credit score. Whether you want to get a loan or some other form of business financing, you’re going to have to boost your credit score and constantly keep perfecting it. Remember, there’s no such thing as a perfect credit score, but you can always strive to improve it. That being said, here are 6 ways you can increase it.
1. Credit report history
It all starts with getting a business credit score report. You can get a business report from most credit reporting companies (like Experian or Equifax). Do note that the reports come at a price and are associated with a fee. Yes, that includes you even if you’re the rightful owner of the business. Once you find out what your score is, you can begin working on ways to improve it.
2. Be timely with your payments
The easiest way to boost your credit score is to pay all of your bills on time. That’s all there is to it. Lots of people miss out on regular payments and that reflects their score badly. Afterwards, you’re in a race with time and most of the things you try will not offset the fact that you’re not timely with your payments.
3. Credit utilization ratio
This is an often overlooked factor by most business owners which a lot of credit agencies take seriously. In lay man’s terms, the credit utilization ratio is the amount of credit you use in comparison to the credit you have available. Most experts suggest keeping that figure well below 15 percent. The easiest way to achieve that goal is to increase your limit and pay off the remaining balances, which is easier said than done but can be accomplished.
4. Maintain good supplier relationships
You’ve probably got several suppliers you like to do business with on a regular basis. If you’ve got a good payment history with them try to establish a separate credit account where you can increase the total number of positive payments on your account. It shows credit agencies you’re trustworthy and timely with your clients/suppliers.
5. Dispute errors
You’d be surprised to find out that a lot of credit card companies will actually work with you and help you remove negative feedback. You still have to have strong claims for that and make sure that everything reported is accurate though. If you notice that you have hard inquiries or certain unpaid debts which shouldn’t be there, make sure to call and dispute it otherwise you’ll end up paying for it with a negative credit score.
A good business credit score is also one of the factors showcasing how well your business/company is doing. If you can maintain a strong credit score you’re probably on top of your game and know what you’re doing.