What Are The Ten Steps To Improve Your Business Credit Rating

Once business registration is done, you are now ready to offer your products/services to the world and make profits. But then you need to ensure that from the beginning, your business should fly high and stay there. To ensure this, you need an excellent business credit score. This will also help enhance business reputation, and goodwill and develop trust among the public. It is equally important to safeguard your organization’s financial assets.

Related Post: Why Would You Want Your Credit Rating to Be as High as Possible?

How to Improve Business Credit Rating

1. Know the fundamentals:

This is the very first step that you need to be aware of to develop an excellent credit score for your business. The latter helps measure your creditworthiness. This is generally used by lenders to determine your repaying ability in case you take a business loan or use your corporate credit card. Typically, business credit score ranges between 0-100. There are three major business credit bureaus namely, Dun & Bradstreet, Equifax, and Experian. They have come up with their own criteria to measure business credit scores.

2. Obtain DUNS Number:

Dun & Bradstreet is among the top business credit bureaus that have a greater say in business credit scores. It is also recognized globally. Use it to make government contract bids. You will be provided with 9 digit number. This agency uses it to create business credit profiles. Moreover, it tracks vendor and lending relationships, sets snapshots of your business creditworthiness, and monitors financial assets and business stability.

3. Separate finances:

Business registration and incorporation means you will need to create finances that is separate from personal accounts. Whether you are a small proprietor or owner, personal transactions should be kept apart from business-oriented ones. You should apply for a corporate bank account and credit card. Ensure accurate and clean business credit. Your personal financial activities should not influence negatively your personal score. Moreover, separating business from personal accounts ensures not risking personal credit while carrying out business-related lending.

4. Set up business credit accounts:

Brainstorm Business Besides corporate credit cards and bank accounts, open several lines of credit. This should be in your business name. Such accounts should be used widely to ensure your company is found to be a trustworthy borrower by potential lenders. Making timely payments can offer a track record of business financial stability.

5. Early or Timely payment always:

This is something crucial and should not be missed out or forgotten. This is to protect your financial assets and reduce liability as well as to enhance business credibility. Paying invoices and bills timely strengthens business credit scores automatically. Hence, mark on the calendar the payment due dates set reminders, and meet deadlines stringently.

6. Vocal vendors:

It would benefit immensely if people get to know about your impeccable payment track record. However, it is not possible if you deal with vendors who are unlikely to report your activities to different business credit bureaus. In case you have just entered busies, then choose vendors having solid reporting strategies. It will be necessary to spread the message so that lenders can gain trust in your business. Brainstorm Business ideas to enhance credit rating.

7. Maintain solid public record:

You need to impress the credit bureaus with your timely payments. Besides checking this, credit bureaus also monitor your public record. They also consider legal findings that are made in your company’s name. It includes derogatory public records, tax liens and bankruptcies. They identify incomplete and late payments that could indicate potential risks for future lenders.

8. Use your credit:

Using credit is a vital factor to enhance your company’s credit score. Hence, avoid opening those credit lines only to leave them sitting for long periods at full capacity. Use credit lines early. But don’t max it out. The thumb rule is to aim for between 20 and 30 percent utilization. Steady usage can help develop a record of creditworthiness and dependability.

9. Maintain accurate information:

Check routinely your company profile to identify and rectify errors. Make necessary updates.

10. Maintain a healthy personal credit score:

Although it is separate from your business credit score, often, lenders consider the former before providing finance.

Therefore, keeping the above tips can help you to improve your Business Credit Rating considerably.