Your business’s credit score is a crucial marker of the overall health of your business. At a glance, it tells potential lenders about your reliability in paying off debts, enabling them to make informed decisions before offering you a loan.
If you’re concerned about that score right now, rest assured that it’s not a static number. There are plenty of easy ways to improve your business’s credit score and open your business up to growth opportunities in the future.
Use a Business Credit Card Responsibly
If you’re a brand-new business owner without much credit history, start writing that history now. A business credit card or line of credit can help you take out small debts that are easy to pay back. Once you get into the habit of accruing and promptly paying off debts, you’ll establish a strong credit score.
Designate your business credit card solely for specific purposes, like utility bills or restocking inventory. Resist the temptation to put all your expenses on that card so you can pay it off every month.
Consolidate Outstanding Debts
Are you currently paying off debts to multiple creditors? Paying several separate interest rates can eat into your profits, especially if you’re still in the early days of your business. Get in touch with those creditors and ask about the possibility of consolidating debts into one monthly payment—with one interest rate.
When you only have one major debt to pay off instead of several smaller loans, you’ll be able to avoid falling deeper into debt as you establish your business.
Check Your History Regularly
Every time you make a payment on one of your debts, check your credit report to ensure that those payments are reflected. In addition, if your score falls significantly, work with your accounting department to locate the source of the discrepancy.
Do any elements of your credit report look inaccurate? Dispute any charges made in error with your credit card company as soon as possible to set things right.
Whether you’re brand-new to small business ownership or have been established for a while now, take the time to improve your business’s credit score with these easy tips. Prioritize your financial health now, and you’ll have plenty of opportunities to grow and innovate in the future.