Six Tips To Improve Your Business Credit Score In 2020
Posted by Rushellkayna on March 16th, 2020
Your business credit score is quite similar to a personal credit score. The only difference is that with the business credit score, you can get banks and lenders to finance for the development and growth of your business. It can be adding more space to your office, renovating, or even buying new vehicles. The lender will look at your Experian business credit report to decide whether or not they should fund your business.
Introducing Business Credit Score
The business credit report is crucial for the health and success of your business. If you own a company and have a clear credit, then you indeed also have a relative credit score. If you want to receive financing for your business in any form, then you have to take care of your business credit score. Your score helps the lenders determine the financial responsibility of your business. The Experian business credit report validates your score.
There are various credit reporting agencies in the market, and they employ multiple methods to determine your credit-worthiness. It includes your trade experiences, outstanding balances, and payment history, etc. The credit score ranges from 0 to 100; the higher the score you have, the more chances of getting your business financed.
Tips For Improving Your Business Credit Score
1 Obtain Your Credit Report
You should get your credit report from one of the reputed credit reporting agencies. Companies like Experian, Equifax, and Dun & Bradstreet are some of the prevalent credit reporting agencies in the market. Of course, those reports are not free, but you have to get them, because those reports are the only source your lenders will refer for your credit score. The credit report will tell you about your current rating, and you will know which areas need attention to improve the score.
2 Make Timely Payments Of Your Bills
If you are bad at making the payments of the bill, then it's going to harm your credit score. It will also pull down your business credit rating. Even worse, if the creditor chooses to report you, then your credit report will appear even uglier. If you pay the bills on time, it will improve the reputation of your business as well as better your score in the Experian business credit report. Another plus is that you will be able to maintain a healthy relationship with your creditors.
3 Use The Least Possible Credit
If you own a hefty amount of money to banks and lenders, then it will negatively affect your credit score. The credit reporting agencies will check your ratio utilized credit and available credit. Your score will get better if you keep that ratio as low as possible. There are various things you can do to make it happen. You should pay your debts, increase your credit limit, reduce credit card spending, and open a new line of credit, etc. Your ratio is bound to cut when you follow those tips.
4 Regularly Check Your Business Credit Report
As a business owner, you are responsible for a lot of things in your business. And while you get caught up in work, you might forget to check your credit score. But it is essential to review and monitor your business's credit report regularly. It will help you come across any errors or inaccuracies in your credit report, and you can work on resolving them. It will ultimately improve your credit score.
5 Work To Eliminate Errors and Negative Feedback
You can work with credit reporting agencies and credit card companies to get rid of any negative feedback in your report. You need to ensure that whatever that gets reported about your company is accurate and relevant. Unpaid accounts and hard inquiries severely impact your report. So, if you notice anything negative on your report, then you must call to dispute it. It's a smart way of improving your credit score. When lenders look at your report, they will be more willing to fund your business owing to your clean record.
6 Refrain From Closing Accounts
You may close accounts because you have made payments towards them. But it's an uninformed choice, and it appears unprofessional. You have likely worked hard enough to pay off the card balances, and you might have closed those accounts to avoid future spending. But, you must know that closing accounts can hurt your report. It may further limit the amount of credit for your account. Thus, it would be best if you refrained from closing accounts.
To Finish Off
Those were the six tips to improve your business credit score in 2020. By following those tips, you can surely get a higher credit score on your Experian business credit report. And a higher score will enable the lenders to trust your business and fund for its development and growth.Also See: Credit Score, Credit Report, Business Credit, Reporting Agencies, Score, Report, Credit
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