Many business owners do not usually take their businesses’ credit rating into account. They work double time to keep their names and products well known, and to keep their clients loyal to them. These are some of the reasons why business entrepreneurs usually forget about their credit ratings, as they are so busy thinking about how to grow their business.
Bad credit ratings in business are comparable to bad credit loans: both cater to people with a bad credit score, but there is no assurance that everything will run smoothly. You would want to improve your credit rating as soon as possible, as it is possible that at some point, you would have to borrow money from the bank to launch or save your business. Lending money from the bank with a bad credit rating hurts your chances of being approved, and you certainly do not want to be declined.
With these things in mind, it is definitely a must to improve your credit rating, and it would be best to start today. Here are some tips to get you started.
Pay Your Company’s Bills On Time
You want a good relationship with your creditor, so it is best to pay your bills on time. Not paying your bills on time will put a dent on your record, most especially if your creditor decides to report your situation. Paying your bills even before the due date will increase your credit score, and it will also help you keep a good relationship with your creditor.
Keep Your Debts at a Minimum
Of course, a start up business needs a good amount of capital. If you can, keep your debts at a minimum, as having a huge amount of debt can hurt your credit rating. Keeping it low will lower your credit utilization, which is a huge boost for your credit rating.
Check for Any Mistakes and Have It Corrected ASAP
It definitely pays to request for your credit report and check it every once in a while. If you find any errors, have them corrected or deleted ASAP to avoid the downfall of your credit rating. Check for errors such as a wrong address, unpaid bills listed on your credit report that you are sure are not yours, or even a misspelling on your name. However small the error is, you have to report it and have it repaired, as this can alter your credit rating. If you want a more in-depth credit card repair then you can go somewhere like Lexington Law to get it fixed.
Do Not Close Your Accounts
Thinking about closing some of your accounts to avoid impulsive decisions when it comes to expenses? Think about it twice, or even thrice, as doing so may affect your business’ credit rating, as well as make your credit limit smaller. Whether you are paid or unpaid, closing an account may cause a negative impact on your business’ credit rating and report.
Use Plenty of Credit
Even if you ask some financial experts, they will advise you to open a few more accounts when starting and boosting a business. Open new business credit accounts and credit cards using your business’ name. It is even advisable to apply for loans using your company’s name as well. Just be sure to pay on time, or even earlier than your due date. This will ensure the creditors that you are, indeed, a reliable and responsible business owner.
Running a business can be tricky at times, but you just have to be extra prepared. Research and educate yourself, and you are surely on your way to a successful business. Good luck on your future endeavors!
