A good business credit score is an important factor in the prosperity of your company. It enables you to obtain favorable terms from lenders and encourages vendors and suppliers to do business with you. On the other hand, with a poor credit score you’ll face higher interest rates, and your company growth could be hindered.
Here are some tips to increase your business credit score.
Pay Off Debt
If your company has accumulated debt, one of the first steps towards improving credit is to work on paying it off. Earmark whatever profits you don’t need for the running of your business into eliminating your debt. Chip away at it bit by bit until it’s gone.
Negotiate With Lenders
If your business is experiencing financial difficulties, you may be having trouble making your payments. Contact your lenders and attempt to negotiate a restructuring of payments. They’ll lose out too if your business is forced into bankruptcy. Additionally, as you manage to repay your debts, check that your lenders are reporting your company’s positive financial steps to the credit agencies.
Use Credit Wisely
Once you get your debts cleared up and have favorably impressed your lenders, manage your credit use wisely so that you don’t fall into the same debt trap again. Maintain a debt to credit limit ratio of no more than 50 percent so that it doesn’t negatively impact your business credit score.
Monitor Your Credit Report
Sometimes your business credit score drops through no fault of your own when incorrect information finds its way onto your credit report. To avoid this, periodically monitor your credit report for errors. If you notice any discrepancies, contact the business credit agencies right away and let them know. Removing these mistakes will inevitably improve your company’s business credit score.
For more advice on repairing business credit scores, get in touch with Black Wolf Capital Group.