A strong business credit score can aid your company in many ways, from helping it secure financing to lowering its insurance rates. If you’d like to raise your business’s credit score, the following techniques will go a long way.
Look Up Credit Reports
Business credit reports are available primarily from three credit bureaus: Dun & Bradstreet, Experian, and Equifax. The process for obtaining your business credit score differs between each agency, but doing so is worth the effort. By seeing your score, you can identify weak points to work on. You may even spot errors, and if that’s the case, you can notify the agency to remove errors and raise your score.
Make On-Time Payments
Counterintuitively, taking on debt may help raise your business’s credit score. That’s because making on-time payments to creditors is a great way to lift a business credit score. The key is to not take on more debt than your business can keep up with, as falling behind on payments is very detrimental. If you’d like to use on-time payments to lift your score, be sure to ask if the lender reports payment information to the three credit bureaus.
Use Credit in Moderation
Credit utilization is another factor that plays into every business credit score. A business’s credit utilization ratio reflects how much of its available revolving credit is in use. (Revolving credit comes from sources like credit cards and lines of credit.) Advice varies on what an ideal ratio is, but many sources recommend using 30% or less of your business’s available credit.
To maintain a good ratio, monitor your credit usage closely to make sure it doesn’t creep up, and always make on-time payments. Another option is to apply for a credit limit increase, though this option should be used sparingly and with caution.
My Commercial Capital has a variety of financing products that can help your business grow while building credit. Get in touch to learn more.