A strong business credit score is an important company asset. It can assist you in obtaining necessary financing such as loans and lines of credit, give you better financing terms and rates, and help you build a reliable network of suppliers and vendors. To calculate your company’s score, credit reporting agencies assess how long you have been in business, the number of credit lines you have recently applied for and opened, and your payment history, including your record of late payments. Here are some steps you can take to build a good business credit score.
Initiate Business Credit
To establish your business credit score, your company must first become a legal entity such as a limited liability company (LLC) or a corporation. To separate your personal finances from the finances of your business, open a business bank account. This makes it much easier to monitor the income, expenses, and financial assets of your company.
Strengthen Your Credit Score
To improve your business credit score, handle your company finances efficiently. This includes making all your bill payments on time. To assist with this, set up software or calendar reminders, enroll in auto-pay plans, and schedule specific times every month to pay your bills. Apply for a business credit card and make timely payments on it. Getting a loan and repaying it on time can also boost your score.
Repair Damaged Credit
If difficult circumstances cause your business credit score to drop, there are ways you can improve it. First of all, periodically monitor your credit report and watch for errors. When you find something amiss, contact the credit bureau, provide appropriate documentation, and ask them to rectify the mistake. If you have been late with payments, try to turn this around and make them on time. If you have outstanding debts, paying them down will improve your score.
For more advice on improving your business credit score, get in touch with Lionheart Commercial Capital.