If your company is just getting started, or if your operating budget has taken some hits recently, your credit score might have dropped to a lower level. Depending on the extent of the decline, your ability to use credit for business purchases might be in jeopardy. If you need to improve your company’s credit rating, the following tips may help.
Update Your Company’s Credit Report
Obtain a copy of your business’s credit report and FICO score from one or all of the leading providers: Experian, TransUnion, and Equifax. Check to see that all the information is up-to-date. If there are inaccuracies with amounts owed, dates of payments, or other information, contact the agency to request that corrections be made. The changes might be enough to help raise your company’s score by several points.
Pay Your Bills on Time
One of the leading factors that determines an individual or business credit score is whether creditors are paid on time. Keep up with regular payments to avoid late fees and having your credit score dinged. If you must make a late payment, contact the creditors to let them know, and make arrangements to make partial payments or catch up as soon as possible.
Make Payment Adjustments If Needed
Even if you are keeping up with monthly bills, you might find your company budget is getting tight. Check with your creditors to see if you can arrange for smaller payments or change the monthly due-date of a serial payment. Creditors are eager to work with you to ensure they continue to receive payment, and this helps to keep your credit score at a positive level.
Avoid Excessive Debt
With business booming, you may be tempted to expand the company or add more services and personnel. Don’t rush to make major purchases until you are sure the operating budget will support them. Maintain an emergency fund for unexpected needs so you don’t have to use credit that you might not be able to repay. Maintain healthy cash flow while putting away reserves for future growth. While you don’t necessarily have to eliminate all debt, be careful not to get in too deep.
There are helpful software programs and apps that can help to monitor your use of credit as well as alert you in case of an attempted hacking into your business accounts. Consider investing in a credit risk reporting option that can help to protect your credit and keep you informed.
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