Useful Tips Regarding Your Business Credit Score
Your business credit score is very similar to your personal credit score, and even though you may not pay much attention to it, that score will follow your business everywhere, and it will be a factor in determining whether you get approved for financing when you need cash for your business. Here are some things to keep in mind about your business credit score.
Why a good business credit score is important
Almost all small businesses will need funding at some point, either to maintain smooth daily operations, or to fuel growth and achieve company objectives. While it is possible to acquire that financing without having a great business credit score, getting approved for loans is always much easier when you have a good business credit score. Apart from having sound financial documents, there is nothing which is a better indicator of your overall business health than your credit score. It tells lenders how conscientious you’ve been about paying bills, how likely you are to go bust in the next year, and whether or not you are a good risk for any kind of loan.
Pay bills promptly
Make sure to pay your suppliers promptly, so that negative activity does not appear on your business credit score. This is one of the most common ways that businesses have their business credit score degraded. On the other hand, when you are making consistently prompt payments, ask your suppliers to report that to one of the business credit bureaus (Experian, Equifax, or Dun & Bradstreet), so that you can benefit by that positive reporting. If possible, ask all your vendors to report to the same business credit bureau, so you can build up a solid score.
Know what’s on your credit report
Don’t rely on the fact that all your business activities will be reported accurately to the credit bureaus, because in fact they are not. You should periodically check what’s on your report, so that you’re aware of everything which appears there, and that it’s all accurate. There are also occasional breaches of credit bureau databases, so you should be aware if you’ve been impacted by one yourself.
Do you have a low business credit score?
Sometimes a less than perfect business credit score does not necessarily have to disqualify you from receiving the funding your company needs, in order to achieve its business objectives. Contact us at Himsl Consulting, to find out if you might be eligible for some type of financing, even though your past credit history may not have been ideal.